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How Does Cadence Design Compare to Its Peers?

Gabriel Kane

US Equity Market Update as of October 26, 2015

(Continued from Prior Part)

Cadence Design and its peers

Now let’s look at a comparison of Cadence Design (CDNS) against its peers.

  • The PE (price-to-earnings) ratios of Cadence, ARM Holdings (ARMH), Ansys (ANSS), Synopsys (SNPS), and Mentor Graphics (MENT) are 33.89x, 46.48x, 34.56x, 33.04x, and 20.26x, respectively.
  • The PBV (price-to-book value) ratios of Cadence, ARM, Ansys, Synopsys, and Mentor Graphics are 4.36x, 8.68x, 3.78x, 2.47x, and 2.40x, respectively.

  • The PS (price-to-sales) ratios of Cadence, ARM, Ansys, Synopsys, and Mentor Graphics are 3.77x, 16.10x, 9.03x, 3.55x, and 2.44x, respectively.

Thus, Cadence has outperformed its peers based on PBV.

ETFs that invest in Cadence Design Systems

The PowerShares DWA Technology Momentum ETF (PTF) invests 2.6% of its holdings in Cadence. The ETF tracks an index of US technology companies selected and weighted by price momentum.

The PowerShares Dynamic Software ETF (PSJ) invests 2.5% of its holdings in Cadence. The ETF uses a quantitative model to choose US software companies across the market capitalization spectrum.

The Guggenheim S&P MidCap 400 Pure Growth ETF (RFG) invests 2.0% of its holdings in Cadence. The ETF tracks a factor-weighted index of the S&P 400 companies exhibiting the strongest growth factors.

Cadence Design and its ETFs compared

Now let’s look at a comparison of Cadence Design and its ETFs:

  • The year-to-date price movements of Cadence, PTF, PSJ, and RFG are 12.6%, 7.5%, 9.1%, and 5.7%, respectively.
  • The PE (price-to-earnings) ratios of Cadence, PTF, PSJ, and RFG are 33.89x, 67.33x, 27.15x, and 22.64x, respectively.
  • The PBV (price-to-book value) ratios of Cadence, PTF, PSJ, and RFG are 4.36x, 7.05x, 4.27x, and 3.58x, respectively.

Thus, Cadence has outperformed its ETFs based on price movement, PE, and PBV.

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