CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
NASDAQ:CDNS • US1273871087
299.46 USD
+11.13 (+3.86%)
At close: Feb 13, 2026
299 USD
-0.46 (-0.15%)
After Hours: 2/13/2026, 8:00:02 PM
We assign a fundamental rating of 6 out of 10 to CDNS. CDNS was compared to 276 industry peers in the Software industry. While CDNS has a great profitability rating, there are some minor concerns on its financial health. CDNS shows excellent growth, but is valued quite expensive already. With these ratings, CDNS could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
- CDNS had positive earnings in the past year.
- In the past year CDNS had a positive cash flow from operations.
- In the past 5 years CDNS has always been profitable.
- Each year in the past 5 years CDNS had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 11.05%, CDNS belongs to the top of the industry, outperforming 86.64% of the companies in the same industry.
- The Return On Equity of CDNS (20.41%) is better than 87.73% of its industry peers.
- The Return On Invested Capital of CDNS (15.75%) is better than 92.06% of its industry peers.
- CDNS had an Average Return On Invested Capital over the past 3 years of 20.16%. This is significantly above the industry average of 10.91%.
- The last Return On Invested Capital (15.75%) for CDNS is well below the 3 year average (20.16%), which needs to be investigated, but indicates that CDNS had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROIC | 15.75% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
1.3 Margins
- With an excellent Profit Margin value of 20.35%, CDNS belongs to the best of the industry, outperforming 85.20% of the companies in the same industry.
- CDNS's Profit Margin has declined in the last couple of years.
- With an excellent Operating Margin value of 31.57%, CDNS belongs to the best of the industry, outperforming 92.78% of the companies in the same industry.
- CDNS's Operating Margin has improved in the last couple of years.
- CDNS's Gross Margin of 85.55% is amongst the best of the industry. CDNS outperforms 92.42% of its industry peers.
- In the last couple of years the Gross Margin of CDNS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% |
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CDNS is creating value.
- The number of shares outstanding for CDNS has been increased compared to 1 year ago.
- The number of shares outstanding for CDNS has been reduced compared to 5 years ago.
- CDNS has a worse debt/assets ratio than last year.
2.2 Solvency
- CDNS has a debt to FCF ratio of 1.68. This is a very positive value and a sign of high solvency as it would only need 1.68 years to pay back of all of its debts.
- CDNS has a Debt to FCF ratio of 1.68. This is in the better half of the industry: CDNS outperforms 69.68% of its industry peers.
- A Debt/Equity ratio of 0.48 indicates that CDNS is not too dependend on debt financing.
- CDNS's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. CDNS is outperformed by 66.43% of its industry peers.
- Although CDNS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | N/A |
ROIC/WACC1.45
WACC10.88%
2.3 Liquidity
- CDNS has a Current Ratio of 3.05. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
- With a decent Current ratio value of 3.05, CDNS is doing good in the industry, outperforming 75.09% of the companies in the same industry.
- CDNS has a Quick Ratio of 2.84. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
- CDNS has a Quick ratio of 2.84. This is in the better half of the industry: CDNS outperforms 74.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
- CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.52%, which is quite impressive.
- CDNS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.21% yearly.
- CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 19.72%.
- Measured over the past years, CDNS shows a quite strong growth in Revenue. The Revenue has been growing by 14.72% on average per year.
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
3.2 Future
- Based on estimates for the next years, CDNS will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.14% on average per year.
- Based on estimates for the next years, CDNS will show a quite strong growth in Revenue. The Revenue will grow by 11.93% on average per year.
EPS Next Y20.58%
EPS Next 2Y17.3%
EPS Next 3Y16.39%
EPS Next 5Y13.14%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- CDNS is valuated quite expensively with a Price/Earnings ratio of 42.60.
- CDNS's Price/Earnings ratio is in line with the industry average.
- CDNS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.68.
- A Price/Forward Earnings ratio of 36.46 indicates a quite expensive valuation of CDNS.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CDNS is on the same level as its industry peers.
- Compared to an average S&P500 Price/Forward Earnings ratio of 28.06, CDNS is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.6 | ||
| Fwd PE | 36.46 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as CDNS.
- CDNS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.13 | ||
| EV/EBITDA | 43.59 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CDNS does not grow enough to justify the current Price/Earnings ratio.
- CDNS has an outstanding profitability rating, which may justify a higher PE ratio.
- A more expensive valuation may be justified as CDNS's earnings are expected to grow with 16.39% in the coming years.
PEG (NY)2.07
PEG (5Y)1.92
EPS Next 2Y17.3%
EPS Next 3Y16.39%
5. Dividend
5.1 Amount
- CDNS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
299.46
+11.13 (+3.86%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)10-27 2025-10-27/amc
Earnings (Next)02-17 2026-02-17/amc
Inst Owners91.74%
Inst Owner Change-88.86%
Ins Owners0.25%
Ins Owner Change-1.67%
Market Cap81.51B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts81.88
Price Target388.73 (29.81%)
Short Float %1.62%
Short Ratio2.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.96%
Min EPS beat(2)4.06%
Max EPS beat(2)5.86%
EPS beat(4)4
Avg EPS beat(4)3.6%
Min EPS beat(4)1.28%
Max EPS beat(4)5.86%
EPS beat(8)8
Avg EPS beat(8)3.98%
EPS beat(12)12
Avg EPS beat(12)3.22%
EPS beat(16)16
Avg EPS beat(16)4.67%
Revenue beat(2)1
Avg Revenue beat(2)-0.36%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)0.03%
Revenue beat(4)1
Avg Revenue beat(4)-0.92%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.03%
Revenue beat(8)2
Avg Revenue beat(8)-0.69%
Revenue beat(12)3
Avg Revenue beat(12)-0.68%
Revenue beat(16)7
Avg Revenue beat(16)-0.18%
PT rev (1m)-0.45%
PT rev (3m)1.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.13%
EPS NY rev (1m)0.12%
EPS NY rev (3m)0.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.6 | ||
| Fwd PE | 36.46 | ||
| P/S | 15.64 | ||
| P/FCF | 55.13 | ||
| P/OCF | 50.42 | ||
| P/B | 15.68 | ||
| P/tB | 43.32 | ||
| EV/EBITDA | 43.59 |
EPS(TTM)7.03
EY2.35%
EPS(NY)8.21
Fwd EY2.74%
FCF(TTM)5.43
FCFY1.81%
OCF(TTM)5.94
OCFY1.98%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)2.07
PEG (5Y)1.92
Graham Number54.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROCE | 20.09% | ||
| ROIC | 15.75% | ||
| ROICexc | 23.73% | ||
| ROICexgc | 60.82% | ||
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% | ||
| FCFM | 28.37% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
ROICexc(3y)28.2%
ROICexc(5y)26.78%
ROICexgc(3y)72.83%
ROICexgc(5y)62.51%
ROCE(3y)25.95%
ROCE(5y)24.28%
ROICexgc growth 3Y4.04%
ROICexgc growth 5Y11.48%
ROICexc growth 3Y-4.84%
ROICexc growth 5Y2.66%
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
F-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 63.33% | ||
| Cap/Sales | 2.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | 139.37% | ||
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 | ||
| Altman-Z | N/A |
F-Score7
WACC10.88%
ROIC/WACC1.45
Cap/Depr(3y)78.99%
Cap/Depr(5y)69.81%
Cap/Sales(3y)3.02%
Cap/Sales(5y)2.97%
Profit Quality(3y)119.11%
Profit Quality(5y)128.61%
High Growth Momentum
Growth
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
EPS Next Y20.58%
EPS Next 2Y17.3%
EPS Next 3Y16.39%
EPS Next 5Y13.14%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year23.27%
EBIT Next 3Y17.85%
EBIT Next 5Y16.55%
FCF growth 1Y19.71%
FCF growth 3Y2.64%
FCF growth 5Y11.29%
OCF growth 1Y20.58%
OCF growth 3Y4.62%
OCF growth 5Y11.56%
CADENCE DESIGN SYS INC / CDNS FAQ
What is the ChartMill fundamental rating of CADENCE DESIGN SYS INC (CDNS) stock?
ChartMill assigns a fundamental rating of 6 / 10 to CDNS.
What is the valuation status for CDNS stock?
ChartMill assigns a valuation rating of 2 / 10 to CADENCE DESIGN SYS INC (CDNS). This can be considered as Overvalued.
Can you provide the profitability details for CADENCE DESIGN SYS INC?
CADENCE DESIGN SYS INC (CDNS) has a profitability rating of 9 / 10.
How financially healthy is CADENCE DESIGN SYS INC?
The financial health rating of CADENCE DESIGN SYS INC (CDNS) is 6 / 10.