Cadence Design Operating Margin vs. Revenue

CDS Stock  EUR 284.00  9.00  3.07%   
Considering Cadence Design's profitability and operating efficiency indicators, Cadence Design Systems may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Cadence Design's ability to earn profits and add value for shareholders.
For Cadence Design profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Cadence Design to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Cadence Design Systems utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Cadence Design's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Cadence Design Systems over time as well as its relative position and ranking within its peers.
  
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Please note, there is a significant difference between Cadence Design's value and its price as these two are different measures arrived at by different means. Investors typically determine if Cadence Design is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Cadence Design's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Cadence Design Systems Revenue vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Cadence Design's current stock value. Our valuation model uses many indicators to compare Cadence Design value to that of its competitors to determine the firm's financial worth.
Cadence Design Systems is rated second in operating margin category among its peers. It is rated below average in revenue category among its peers totaling about  11,704,627,013  of Revenue per Operating Margin. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Cadence Design's earnings, one of the primary drivers of an investment's value.

Cadence Revenue vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Cadence Design

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.30 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.

Cadence Design

Revenue

 = 

Money Received

-

Discounts and Returns

 = 
3.56 B
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include products or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Cadence Revenue vs Competition

Cadence Design Systems is rated below average in revenue category among its peers. Market size based on revenue of Software - Application industry is currently estimated at about 48.51 Billion. Cadence Design holds roughly 3.56 Billion in revenue claiming about 7% of equities listed under Software - Application industry.

Cadence Design Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Cadence Design, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Cadence Design will eventually generate negative long term returns. The profitability progress is the general direction of Cadence Design's change in net profit over the period of time. It can combine multiple indicators of Cadence Design, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit design blocks worldwide. Cadence Design Systems, Inc. was founded in 1988 and is headquartered in San Jose, California. CADENCE DESIGN operates under Software - Application classification in Germany and is traded on Frankfurt Stock Exchange. It employs 7500 people.

Cadence Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Cadence Design. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Cadence Design position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Cadence Design's important profitability drivers and their relationship over time.

Use Cadence Design in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Cadence Design position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cadence Design will appreciate offsetting losses from the drop in the long position's value.

Cadence Design Pair Trading

Cadence Design Systems Pair Trading Analysis

The ability to find closely correlated positions to Cadence Design could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Cadence Design when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Cadence Design - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Cadence Design Systems to buy it.
The correlation of Cadence Design is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Cadence Design moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Cadence Design Systems moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Cadence Design can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Cadence Design position

In addition to having Cadence Design in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Additional Information and Resources on Investing in Cadence Stock

When determining whether Cadence Design Systems is a strong investment it is important to analyze Cadence Design's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Cadence Design's future performance. For an informed investment choice regarding Cadence Stock, refer to the following important reports:
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You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
To fully project Cadence Design's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Cadence Design Systems at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Cadence Design's income statement, its balance sheet, and the statement of cash flows.
Potential Cadence Design investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Cadence Design investors may work on each financial statement separately, they are all related. The changes in Cadence Design's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Cadence Design's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.