On May 20, a recent SEC filing unveiled that James D Plummer, Board Member at Cadence Design Systems CDNS made an insider sell.
What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Tuesday, Plummer sold 868 shares of Cadence Design Systems. The total transaction value is $277,715.
Cadence Design Systems shares are trading down 0.0% at $320.55 at the time of this writing on Wednesday morning.
About Cadence Design Systems
Cadence Design Systems is a provider of electronic design automation software, intellectual property, and system design and analysis products. EDA software automates and aids in the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. Cadence offers a portfolio of design IP, as well as system design and analysis products, which enables system-level analysis and verification solutions.
Understanding the Numbers: Cadence Design Systems’s Finances
Revenue Growth: Cadence Design Systems’s remarkable performance in 3 months is evident. As of 31 March, 2025, the company achieved an impressive revenue growth rate of 23.12%. This signifies a substantial increase in the company’s top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Information Technology sector.
Key Profitability Indicators:
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Gross Margin: With a high gross margin of 86.55%, the company demonstrates effective cost control and strong profitability relative to its peers.
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Earnings per Share (EPS): Cadence Design Systems’s EPS is below the industry average, signaling challenges in bottom-line performance with a current EPS of 1.01.
Debt Management: With a below-average debt-to-equity ratio of 0.52, Cadence Design Systems adopts a prudent financial strategy, indicating a balanced approach to debt management.
Evaluating Valuation:
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Price to Earnings (P/E) Ratio: With a lower-than-average P/E ratio of 81.36, the stock indicates an attractive valuation, potentially presenting a buying opportunity.
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Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 18.01, Cadence Design Systems’s stock is perceived as being overvalued in the market, particularly in relation to sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): Indicated by a lower-than-industry-average EV/EBITDA ratio of 49.96, the company suggests a potential undervaluation, which might be advantageous for value-focused investors.
Market Capitalization Perspectives: The company’s market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.
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Understanding the Significance of Insider Transactions
Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.
In legal terms, an “insider” refers to any officer, director, or beneficial owner of more than ten percent of a company’s equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.
When a company insider makes a new purchase, that is an indication that they expect the stock to rise.
Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.
Exploring Key Transaction Codes
For investors, a primary focus lies on transactions occurring in the open market, as indicated in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Cadence Design Systems’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
