299.65 USD
+0.65 (+0.22%)
At close: Feb 11, 2026
301 USD
+1.35 (+0.45%)
Pre-Market: 2/12/2026, 4:00:01 AM
Taking everything into account, CDNS scores 6 out of 10 in our fundamental rating. CDNS was compared to 277 industry peers in the Software industry. CDNS scores excellent on profitability, but there are some minor concerns on its financial health. CDNS is valued quite expensive, but it does show an excellent growth. These ratings would make CDNS suitable for growth investing!
1. Profitability
1.1 Basic Checks
- CDNS had positive earnings in the past year.
- CDNS had a positive operating cash flow in the past year.
- Each year in the past 5 years CDNS has been profitable.
- Each year in the past 5 years CDNS had a positive operating cash flow.
1.2 Ratios
- CDNS's Return On Assets of 11.05% is amongst the best of the industry. CDNS outperforms 86.64% of its industry peers.
- Looking at the Return On Equity, with a value of 20.41%, CDNS belongs to the top of the industry, outperforming 87.73% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 15.75%, CDNS belongs to the best of the industry, outperforming 92.06% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 10.83%.
- The 3 year average ROIC (20.16%) for CDNS is well above the current ROIC(15.75%). The reason for the recent decline needs to be investigated.
| 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
- Looking at the Profit Margin, with a value of 20.35%, CDNS belongs to the top of the industry, outperforming 85.20% of the companies in the same industry.
- In the last couple of years the Profit Margin of CDNS has declined.
- CDNS's Operating Margin of 31.57% is amongst the best of the industry. CDNS outperforms 92.78% of its industry peers.
- 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.
- CDNS's Gross Margin has been stable in the last couple of years.
| 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.
- Compared to 1 year ago, CDNS has more shares outstanding
- Compared to 5 years ago, CDNS has less shares outstanding
- 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 better Debt to FCF ratio (1.68) than 69.68% of its industry peers.
- CDNS has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
- With a Debt to Equity ratio value of 0.48, CDNS is not doing good in the industry: 66.06% of the companies in the same industry are doing better.
- 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/WACC1.43
WACC11.03%
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.
- Looking at the Current ratio, with a value of 3.05, CDNS is in the better half of the industry, outperforming 75.09% of the companies in the same industry.
- A Quick Ratio of 2.84 indicates that CDNS has no problem at all paying its short term obligations.
- Looking at the Quick ratio, with a value of 2.84, CDNS is in the better half of the industry, outperforming 74.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 28.52% over the past year.
- Measured over the past years, CDNS shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.21% on average per year.
- The Revenue has grown by 19.72% in the past year. This is quite good.
- CDNS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.72% yearly.
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
- The Earnings Per Share is expected to grow by 13.14% on average over the next years. This is quite good.
- CDNS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.93% yearly.
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
- A Price/Earnings ratio of 42.62 indicates a quite expensive valuation of CDNS.
- Compared to the rest of the industry, the Price/Earnings ratio of CDNS is on the same level as its industry peers.
- The average S&P500 Price/Earnings ratio is at 28.18. CDNS is valued rather expensively when compared to this.
- With a Price/Forward Earnings ratio of 36.48, CDNS can be considered very expensive at the moment.
- CDNS's Price/Forward Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 28.01, CDNS is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.62 | ||
| Fwd PE | 36.48 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CDNS is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of CDNS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.16 | ||
| EV/EBITDA | 43.62 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- CDNS has an outstanding profitability rating, which may justify a higher PE ratio.
- CDNS's earnings are expected to grow with 16.39% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.07
PEG (5Y)1.92
EPS Next 2Y17.3%
EPS Next 3Y16.39%
5. Dividend
5.1 Amount
- No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
299.65
+0.65 (+0.22%)
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-2.22%
Ins Owners0.25%
Ins Owner Change-1.68%
Market Cap81.56B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts81.88
Price Target388.73 (29.73%)
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 | 42.62 | ||
| Fwd PE | 36.48 | ||
| P/S | 15.65 | ||
| P/FCF | 55.16 | ||
| P/OCF | 50.45 | ||
| P/B | 15.69 | ||
| P/tB | 43.35 | ||
| EV/EBITDA | 43.62 |
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
WACC11.03%
ROIC/WACC1.43
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.