Discounted Cash Flow (DCF) Analysis Unlevered

Cadence Design Systems, Inc. (CDNS)

$180.74

-4.29 (-2.32%)

All numbers are in Millions, Currency in USD

Stock DCF: 54.28 | 180.74 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	1,943.03	2,138.02	2,336.32	2,561.89	2,809.24	3,080.48	3,377.90	3,704.04	4,061.67	4,453.82	4,883.84
Revenue (%)
EBITDA	456.23	518.25	621.15	634.55	695.82	763	836.67	917.45	1,006.03	1,103.17	1,209.68
EBITDA (%)
EBIT	340.71	399.53	497.80	491.27	538.71	590.72	647.75	710.30	778.87	854.08	936.54
EBIT (%)
Depreciation	115.52	118.72	123.35	143.28	157.11	172.28	188.92	207.16	227.16	249.09	273.14
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	692.54	533.30	705.21	775.15	849.99	932.06	1,022.05	1,120.73	1,228.93	1,347.59	1,477.70
Total Cash (%)
Account Receivables	190.43	297.08	304.55	313.67	343.95	377.16	413.58	453.51	497.30	545.31	597.96
Account Receivables (%)
Inventories	33.21	28.16	55.80	46.24	50.70	55.60	60.97	66.86	73.31	80.39	88.15
Inventories (%)
Accounts Payable	4.82	5.48	5.90	6.47	7.09	7.78	8.53	9.35	10.25	11.24	12.33
Accounts Payable (%)
Capital Expenditure	-57.90	-61.50	-74.60	-77.28	-84.74	-92.93	-101.90	-111.74	-122.52	-134.35	-147.33
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 180.74
Beta	1.099
Diluted Shares Outstanding	278.86
Cost of Debt
Tax Rate	9.43
After-tax Cost of Debt	3.38%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.737
Total Debt	454.71
Total Equity	50,400.79
Total Capital	50,855.50
Debt Weighting	0.89
Equity Weighting	99.11
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Projected	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	1,943.03	2,138.02	2,336.32	2,561.89	2,809.24	3,080.48	3,377.90	3,704.04	4,061.67	4,453.82	4,883.84
EBITDA	456.23	518.25	621.15	634.55	695.82	763	836.67	917.45	1,006.03	1,103.17	1,209.68
EBIT	340.71	399.53	497.80	491.27	538.71	590.72	647.75	710.30	778.87	854.08	936.54
Tax Rate	35.22%	8.13%	-106.48%	-9.41%	6.65%	9.43%	-9.41%	-9.41%	-9.41%	-9.41%	-9.41%
EBIAT	220.73	367.03	1,027.86	537.50	502.86	535	708.70	777.13	852.16	934.44	1,024.66
Depreciation	115.52	118.72	123.35	143.28	157.11	172.28	188.92	207.16	227.16	249.09	273.14
Accounts Receivable	-	-106.66	-7.46	-9.12	-30.28	-33.21	-36.42	-39.93	-43.79	-48.01	-52.65
Inventories	-	5.05	-27.64	9.56	-4.46	-4.90	-5.37	-5.89	-6.45	-7.08	-7.76
Accounts Payable	-	0.66	0.41	0.57	0.62	0.68	0.75	0.82	0.90	0.99	1.09
Capital Expenditure	-57.90	-61.50	-74.61	-77.28	-94.81	-66.88	-101.90	-111.74	-122.52	-134.35	-147.33
UFCF	278.35	323.30	1,041.91	604.50	541.10	576.94	754.69	827.55	907.45	995.07	1,091.14
WACC
PV UFCF				657.04	541.10	530.81	638.83	644.51	650.23	656	661.83
SUM PV UFCF											3,533.95

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.69
Free cash flow (t + 1)	1,112.97
Terminal Value	16,636.28
Present Value of Terminal Value	10,967.52

Intrinsic Value

Enterprise Value	14,501.47
Net Debt	-634.23
Equity Value	15,135.70
Shares Outstanding	278.86
Equity Value Per Share	54.28