317.45 USD
-3.15 (-0.98%)
317.45 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to CDNS. CDNS was compared to 276 industry peers in the Software industry. CDNS has an excellent profitability rating, but there are some minor concerns on its financial health. CDNS is valued quite expensively, but it does show have an excellent growth rating. With these ratings, CDNS could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
- In the past year CDNS was profitable.
- CDNS had a positive operating cash flow in the past year.
- Each year in the past 5 years CDNS has been profitable.
- In the past 5 years CDNS always reported a positive cash flow from operatings.
1.2 Ratios
- CDNS's Return On Assets of 11.05% is amongst the best of the industry. CDNS outperforms 86.23% of its industry peers.
- The Return On Equity of CDNS (20.41%) is better than 88.04% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 15.75%, CDNS belongs to the top of the industry, outperforming 92.75% 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 10.78%.
- 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
- CDNS's Profit Margin of 20.35% is amongst the best of the industry. CDNS outperforms 84.42% of its industry peers.
- In the last couple of years the Profit Margin of CDNS has declined.
- The Operating Margin of CDNS (31.57%) is better than 93.12% of its industry peers.
- CDNS's Operating Margin has improved in the last couple of years.
- CDNS has a Gross Margin of 85.55%. This is amongst the best in the industry. CDNS outperforms 93.12% 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.
- CDNS has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for CDNS has been reduced compared to 5 years ago.
- Compared to 1 year ago, CDNS has a worse debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of CDNS is 1.68, which is an excellent value as it means it would take CDNS, only 1.68 years of fcf income to pay off 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 70.29% 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: 65.22% 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%
2.3 Liquidity
- A Current Ratio of 3.05 indicates that CDNS has no problem at all paying its short term obligations.
- CDNS has a Current ratio of 3.05. This is in the better half of the industry: CDNS outperforms 75.72% of its industry peers.
- 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.
- The Quick ratio of CDNS (2.84) is better than 74.64% 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.
- 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.
- Looking at the last year, CDNS shows a quite strong growth in Revenue. The Revenue has grown by 19.72% in the last year.
- 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
- 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 Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
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.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 45.16 indicates a quite expensive valuation of CDNS.
- CDNS's Price/Earnings is on the same level as the industry average.
- CDNS is valuated expensively when we compare the Price/Earnings ratio to 27.47, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 38.68, the valuation of CDNS can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CDNS is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of CDNS to the average of the S&P500 Index (24.26), we can say CDNS is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.16 | ||
| Fwd PE | 38.68 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CDNS indicates a somewhat cheap valuation: CDNS is cheaper than 62.68% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.44 | ||
| EV/EBITDA | 46.68 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of CDNS may justify a higher PE ratio.
- A more expensive valuation may be justified as CDNS's earnings are expected to grow with 16.29% in the coming years.
PEG (NY)2.21
PEG (5Y)2.03
EPS Next 2Y17.24%
EPS Next 3Y16.29%
5. Dividend
5.1 Amount
- No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
317.45
-3.15 (-0.98%)
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 Change0.27%
Ins Owners0.25%
Ins Owner Change-1.68%
Market Cap86.41B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts81.88
Price Target389.55 (22.71%)
Short Float %1.48%
Short Ratio2.27
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)-0.28%
PT rev (3m)3.86%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.1%
EPS NY rev (1m)0%
EPS NY rev (3m)1.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.33%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.16 | ||
| Fwd PE | 38.68 | ||
| P/S | 16.58 | ||
| P/FCF | 58.44 | ||
| P/OCF | 53.45 | ||
| P/B | 16.62 | ||
| P/tB | 45.92 | ||
| EV/EBITDA | 46.68 |
EPS(TTM)7.03
EY2.21%
EPS(NY)8.21
Fwd EY2.59%
FCF(TTM)5.43
FCFY1.71%
OCF(TTM)5.94
OCFY1.87%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)2.21
PEG (5Y)2.03
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%
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 Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
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 3 / 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.