Price to FCFE (P/FCFE)
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Cadence Design Systems Inc. pages available for free this week:
- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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Free Cash Flow to Equity (FCFE)
Cadence Design Systems Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data reveals notable trends in the cash flow activities over the five-year period from 2020 to 2024. Two key metrics, net cash provided by operating activities and free cash flow to equity (FCFE), are analyzed for their patterns and changes.
- Net Cash Provided by Operating Activities
- This metric shows a consistent upward trend from 2020 through 2023. Starting at approximately 905 million USD in 2020, it increased each year, reaching a peak of around 1.35 billion USD in 2023. In 2024, there was a slight decline to about 1.26 billion USD. The overall growth indicates strengthened operational cash generation capabilities over most of the period, with a mild pullback in the final year.
- Free Cash Flow to Equity (FCFE)
- The FCFE demonstrates more volatility but generally a strong upward momentum. Beginning at roughly 810 million USD in 2020, it rose steadily to just over 1 billion USD in 2021, then surged significantly to approximately 1.52 billion USD in 2022. There was a drop in 2023 to around 1.15 billion USD, but the metric rebounded substantially in 2024, reaching a high of nearly 2.94 billion USD. This pattern suggests fluctuating free cash available to equity holders, with a particularly notable increase in the last year.
Overall, the company exhibited improved cash generation from operating activities across most years, with a minor decrease in the last reported period. The FCFE displayed higher variability but ended with a significant increase by 2024, which may indicate effective management of capital expenditures, financing, and other cash flow components affecting equity holders. These trends point to a strengthening position in free cash available for shareholders toward the end of the analyzed timeframe.
Price to FCFE Ratio, Current
Cadence Design Systems Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| ServiceNow Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| P/FCFE, Sector | |
| Software & Services | |
| P/FCFE, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Cadence Design Systems Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/FCFE, Sector | ||||||
| Software & Services | ||||||
| P/FCFE, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
The financial data reveals several noteworthy trends for the period ending from December 31, 2020, through December 31, 2024.
- Share Price
- The share price exhibited an overall upward trajectory from 133.16 US$ at the end of 2020, peaking at 300.74 US$ by the end of 2023. This represents strong price appreciation over the four years. However, there was a decline to 258.34 US$ in 2024, indicating some correction or market adjustment after the peak.
- Free Cash Flow to Equity (FCFE) per share
- The FCFE per share consistently increased from 2.9 US$ in 2020 to 5.56 US$ in 2022, reflecting improving cash generation available to shareholders. Although there was a decline to 4.21 US$ in 2023, the figure sharply rebounded to 10.73 US$ in 2024, more than doubling the prior year's amount and representing a significant increase in free cash flow available to equity holders.
- Price to FCFE (P/FCFE) Ratio
- This valuation ratio showed a declining trend from 45.86 in 2020 down to 33.41 in 2022, suggesting that the share price was becoming more reasonably valued relative to free cash flow. However, the ratio surged dramatically to 71.4 in 2023. This spike was primarily driven by the sharp increase in share price in 2023, which outpaced the decrease in FCFE per share that year. In 2024, the P/FCFE ratio fell considerably to 24.08, reflecting both the decrease in share price and the substantial increase in FCFE per share.
In summary, the data indicates a pattern of strong share price appreciation coupled with improving free cash flow generation over the period, apart from a minor downturn in 2023. The P/FCFE valuation fluctuated accordingly, showing signs of being elevated at the 2023 peak but becoming more attractive by 2024. The dramatic rise in FCFE per share in 2024, along with a reduced valuation multiple, may signal improved underlying financial performance and a more favorable market valuation at that point.