Cadence Design Systems – Software Stocks To Invest In 2021
Cadence Design Systems offers technological solutions that are positioned at the intersection of hardware and software. Their primary expertise is in the area of integrated circuit design and testing. Think about advanced optical systems that a company like Corning designs. They use Cadence’s software. Or consider high-end engine designing at an auto major like Honda. A company like AMD is known for making graphical units. They need technological solutions to conduct their process emulation. Cadence Design Systems is poised to benefit from industry trends like artificial intelligence and 5G. If you are looking for software application stocks to buy, then Cadence Design Systems is one example of a cutting-edge innovator. Cadence Design Systems is a sub-$50 billion market cap company. Many tech companies in this segment tend to have negative earnings but high growth trends. However, Cadence has stable financials.
A Closer Look at the Numbers
Cadence Design Systems has grown its revenue from $1.1 billion in 2011 to $2.6 billion in 2020. It has delivered a revenue CAGR of 9.5% over a 10-year period. Meanwhile, net income has risen from $72 million in 2011 to $591 million in 2020. It had touched $989 million in 2019. The net income CAGR for the 10-year period works out to a stellar 23.4%. Free cash flow has also grown almost 4X, rising from $209 million in 2010 to $810 million in 2020. If you are looking for software stocks to invest in 2021, then Cadence Design Systems has a strong set of financial numbers to demonstrate its business fundamentals. While revenue growth is often the metric that people look at, profitability is very important in the long run.
Software Application Stocks To Buy
Cadence Design Systems has maintained a high gross margin of over 85% for the most part throughout the last decade. The stock has grown over 500% if we look at the period between October 2016 to October 2021. Cadence is headquartered in San Jose, California.
