Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Cadence Design Systems Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 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).
The financial information reveals fluctuating trends in both net cash provided by operating activities and free cash flow to equity (FCFE) over the five-year period. Net cash from operations generally increased, while FCFE exhibited more pronounced volatility.
- Net Cash from Operating Activities
- Net cash provided by operating activities demonstrated an overall upward trajectory. It increased from US$1,100,958 thousand in 2021 to US$1,241,894 thousand in 2022, and further to US$1,349,176 thousand in 2023. A slight decrease was observed in 2024, falling to US$1,260,551 thousand, before a substantial increase to US$1,728,781 thousand in 2025. This suggests improving core business cash generation, with a significant surge in the most recent year.
- Free Cash Flow to Equity (FCFE)
- FCFE experienced considerable variation. It rose significantly from US$1,032,792 thousand in 2021 to US$1,517,254 thousand in 2022. However, a decline was noted in 2023, with FCFE decreasing to US$1,146,673 thousand. A substantial increase occurred in 2024, reaching US$2,940,776 thousand, representing the highest value in the observed period. FCFE then decreased in 2025 to US$1,586,910 thousand. This pattern indicates that cash flow available to equity holders is subject to significant year-over-year changes.
- Relationship between Operating Cash Flow and FCFE
- While both metrics generally trended upward, the FCFE fluctuations were more dramatic than those of net cash from operations. This suggests that factors beyond core operating cash flow, such as financing activities or changes in non-operating assets, significantly influence the cash flow ultimately available to equity holders. The divergence between the two metrics is particularly noticeable in 2023 and 2025, where operating cash flow remained relatively strong while FCFE decreased.
The substantial increase in FCFE in 2024, followed by a decrease in 2025, warrants further investigation to understand the underlying drivers of these changes. The volatility in FCFE suggests potential sensitivity to specific investment decisions, financing strategies, or other non-operational factors.
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Price to FCFE Ratio, Current
Cadence Design Systems Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 275,393,000 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,586,910) |
| FCFE per share | 5.76 |
| Current share price (P) | 338.42 |
| Valuation Ratio | |
| P/FCFE | 58.73 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | 6.98 |
| Adobe Inc. | 10.00 |
| AppLovin Corp. | 28.64 |
| CrowdStrike Holdings Inc. | 170.10 |
| Datadog Inc. | 295.12 |
| International Business Machines Corp. | 15.22 |
| Intuit Inc. | 14.65 |
| Microsoft Corp. | 58.01 |
| Oracle Corp. | 25.01 |
| Palantir Technologies Inc. | 178.37 |
| Palo Alto Networks Inc. | 117.00 |
| Salesforce Inc. | 7.72 |
| ServiceNow Inc. | 26.77 |
| Synopsys Inc. | 5.25 |
| Workday Inc. | 15.14 |
| P/FCFE, Sector | |
| Software & Services | 39.03 |
| P/FCFE, Industry | |
| Information Technology | 59.67 |
Based on: 10-K (reporting date: 2025-12-31).
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, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 272,651,000 | 274,108,000 | 272,239,000 | 272,940,000 | 277,336,000 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,586,910) | 2,940,776) | 1,146,673) | 1,517,254) | 1,032,792) | |
| FCFE per share3 | 5.82 | 10.73 | 4.21 | 5.56 | 3.72 | |
| Share price1, 4 | 296.59 | 258.34 | 300.74 | 185.70 | 135.21 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 50.96 | 24.08 | 71.40 | 33.41 | 36.31 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Accenture PLC | 9.96 | 23.91 | 21.01 | 17.87 | 25.76 | |
| Adobe Inc. | 12.06 | 18.02 | 41.83 | 21.32 | 34.26 | |
| AppLovin Corp. | 35.43 | 45.36 | 23.30 | — | 22.51 | |
| CrowdStrike Holdings Inc. | 71.69 | 85.82 | 42.65 | 99.64 | 41.38 | |
| Datadog Inc. | 153.91 | 28.64 | 71.93 | 69.38 | 202.25 | |
| International Business Machines Corp. | 14.89 | 20.90 | 9.97 | 11.97 | 48.45 | |
| Intuit Inc. | 31.01 | 38.43 | 38.74 | 13.86 | 86.74 | |
| Microsoft Corp. | 60.89 | 42.11 | 43.32 | 36.73 | 42.54 | |
| Oracle Corp. | 89.42 | 48.38 | 15.47 | — | 8.36 | |
| Palantir Technologies Inc. | 151.45 | 256.11 | 74.28 | 96.89 | 198.12 | |
| Palo Alto Networks Inc. | 50.89 | 52.90 | 79.75 | 29.54 | 32.91 | |
| Salesforce Inc. | 25.91 | 38.33 | 31.06 | 16.56 | 49.52 | |
| ServiceNow Inc. | 26.94 | 61.82 | 58.19 | 44.44 | 64.54 | |
| Synopsys Inc. | 6.21 | 63.94 | 57.04 | 33.41 | 40.55 | |
| Workday Inc. | 29.52 | 36.59 | 19.79 | 49.17 | 40.57 | |
| P/FCFE, Sector | ||||||
| Software & Services | 40.45 | 39.85 | 32.92 | 31.52 | 34.18 | |
| P/FCFE, Industry | ||||||
| Information Technology | 45.13 | 36.69 | 33.14 | 26.97 | 27.38 | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Data adjusted for splits and stock dividends.
3 2025 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,586,910,000 ÷ 272,651,000 = 5.82
4 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
5 2025 Calculation
P/FCFE = Share price ÷ FCFE per share
= 296.59 ÷ 5.82 = 50.96
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibited considerable fluctuation over the five-year period. Initial values indicated a relatively high valuation based on free cash flow, followed by periods of both contraction and expansion.
- Share Price
- The share price demonstrated an increasing trend from 2021 to 2023, peaking at 300.74 US$ in 2023. A subsequent decrease was observed in 2024 to 258.34 US$, followed by a recovery to 296.59 US$ in 2025. This suggests periods of investor optimism and subsequent correction, ultimately ending with a price near the 2023 level.
- FCFE per Share
- Free Cash Flow to Equity per share increased from 3.72 US$ in 2021 to 5.56 US$ in 2022. A decline to 4.21 US$ occurred in 2023, before a substantial increase to 10.73 US$ in 2024. The value then decreased to 5.82 US$ in 2025. This indicates volatility in the company’s ability to generate cash flow available to equity holders.
- P/FCFE Ratio
- The P/FCFE ratio began at 36.31 in 2021 and decreased to 33.41 in 2022. A significant increase to 71.40 was recorded in 2023, coinciding with the peak in share price and a decrease in FCFE per share. The ratio then experienced a substantial decline to 24.08 in 2024, driven by the large increase in FCFE per share. Finally, the ratio rose to 50.96 in 2025, reflecting a combination of share price increase and a decrease in FCFE per share. The fluctuations suggest that investor sentiment and the company’s cash flow generation capabilities are both influencing the valuation.
The interplay between share price and FCFE per share is evident in the P/FCFE ratio’s movements. The largest single-year change in the ratio occurred between 2023 and 2024, highlighting the sensitivity of this metric to changes in both components. Overall, the P/FCFE ratio suggests a dynamic valuation environment.
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