CADENCE DESIGN SYS INC (CDNS) Fundamental Analysis & Valuation
NASDAQ:CDNS • US1273871087
294.16 USD
+0.87 (+0.3%)
At close: Mar 11, 2026
294.16 USD
0 (0%)
After Hours: 3/11/2026, 4:07:20 PM
This CDNS fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
We assign a fundamental rating of 7 out of 10 to CDNS. CDNS was compared to 277 industry peers in the Software industry. CDNS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CDNS shows excellent growth, but is valued quite expensive already. These ratings would make CDNS suitable for growth and quality investing!
1. CDNS Profitability Analysis
1.1 Basic Checks
- In the past year CDNS was profitable.
- CDNS had a positive operating cash flow in the past year.
- CDNS had positive earnings in each of the past 5 years.
- CDNS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 10.92%, CDNS belongs to the top of the industry, outperforming 86.64% of the companies in the same industry.
- CDNS has a Return On Equity of 20.26%. This is amongst the best in the industry. CDNS outperforms 87.00% of its industry peers.
- CDNS has a better Return On Invested Capital (14.48%) than 92.06% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 10.89%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.92% | ||
| ROE | 20.26% | ||
| ROIC | 14.48% |
ROA(3y)13.68%
ROA(5y)14.69%
ROE(3y)24.47%
ROE(5y)25.95%
ROIC(3y)17.13%
ROIC(5y)17.76%
1.3 Margins
- CDNS's Profit Margin of 20.94% is amongst the best of the industry. CDNS outperforms 87.36% of its industry peers.
- CDNS's Profit Margin has been stable in the last couple of years.
- CDNS's Operating Margin of 31.36% is amongst the best of the industry. CDNS outperforms 94.95% of its industry peers.
- CDNS's Operating Margin has improved in the last couple of years.
- CDNS has a better Gross Margin (86.36%) than 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 | 31.36% | ||
| PM (TTM) | 20.94% | ||
| GM | 86.36% |
OM growth 3Y1.71%
OM growth 5Y5.38%
PM growth 3Y-4.23%
PM growth 5Y-1%
GM growth 3Y-1.21%
GM growth 5Y-0.51%
2. CDNS Health Analysis
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CDNS is creating some value.
- Compared to 1 year ago, CDNS has less shares outstanding
- CDNS has less shares outstanding than it did 5 years ago.
- CDNS has a better debt/assets ratio than last year.
2.2 Solvency
- CDNS has an Altman-Z score of 12.78. This indicates that CDNS is financially healthy and has little risk of bankruptcy at the moment.
- CDNS has a better Altman-Z score (12.78) than 93.86% of its industry peers.
- CDNS has a debt to FCF ratio of 1.56. This is a very positive value and a sign of high solvency as it would only need 1.56 years to pay back of all of its debts.
- The Debt to FCF ratio of CDNS (1.56) is better than 70.40% of its industry peers.
- CDNS has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
- CDNS has a Debt to Equity ratio of 0.45. This is in the lower half of the industry: CDNS underperforms 64.26% of its industry peers.
- Even though the debt/equity ratio score it not favorable for CDNS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 1.56 | ||
| Altman-Z | 12.78 |
ROIC/WACC1.34
WACC10.81%
2.3 Liquidity
- CDNS has a Current Ratio of 2.86. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
- With a decent Current ratio value of 2.86, CDNS is doing good in the industry, outperforming 72.56% of the companies in the same industry.
- A Quick Ratio of 2.67 indicates that CDNS has no problem at all paying its short term obligations.
- The Quick ratio of CDNS (2.67) is better than 71.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.86 | ||
| Quick Ratio | 2.67 |
3. CDNS Growth Analysis
3.1 Past
- The Earnings Per Share has grown by an nice 19.60% 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 20.68% on average per year.
- CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.12%.
- CDNS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.57% yearly.
EPS 1Y (TTM)19.6%
EPS 3Y18.69%
EPS 5Y20.68%
EPS Q2Q%5.85%
Revenue 1Y (TTM)14.12%
Revenue growth 3Y14.14%
Revenue growth 5Y14.57%
Sales Q2Q%6.2%
3.2 Future
- CDNS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.49% yearly.
- CDNS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.98% yearly.
EPS Next Y15.46%
EPS Next 2Y15.17%
EPS Next 3Y13.6%
EPS Next 5Y14.49%
Revenue Next Year13.87%
Revenue Next 2Y13.12%
Revenue Next 3Y13.02%
Revenue Next 5Y12.98%
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. CDNS Valuation Analysis
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 41.20, the valuation of CDNS can be described as expensive.
- 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 26.25. CDNS is valued rather expensively when compared to this.
- CDNS is valuated quite expensively with a Price/Forward Earnings ratio of 35.68.
- CDNS's Price/Forward Earnings ratio is in line with the industry average.
- When comparing the Price/Forward Earnings ratio of CDNS to the average of the S&P500 Index (24.39), we can say CDNS is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.2 | ||
| Fwd PE | 35.68 |
4.2 Price Multiples
- CDNS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDNS is cheaper than 61.73% of the companies 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 | 51.14 | ||
| EV/EBITDA | 42.39 |
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 13.60% in the coming years.
PEG (NY)2.67
PEG (5Y)1.99
EPS Next 2Y15.17%
EPS Next 3Y13.6%
5. CDNS Dividend Analysis
5.1 Amount
- No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
CDNS Fundamentals: All Metrics, Ratios and Statistics
294.16
+0.87 (+0.3%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-17 2026-02-17/amc
Earnings (Next)04-27 2026-04-27
Inst Owners89.74%
Inst Owner Change3.04%
Ins Owners0.24%
Ins Owner Change-1.5%
Market Cap81.15B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts83.13
Price Target379.71 (29.08%)
Short Float %1.85%
Short Ratio2.09
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)3.92%
Min EPS beat(2)1.98%
Max EPS beat(2)5.86%
EPS beat(4)4
Avg EPS beat(4)3.78%
Min EPS beat(4)1.98%
Max EPS beat(4)5.86%
EPS beat(8)8
Avg EPS beat(8)4.05%
EPS beat(12)12
Avg EPS beat(12)3.19%
EPS beat(16)16
Avg EPS beat(16)4.44%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-0.82%
Max Revenue beat(2)-0.75%
Revenue beat(4)1
Avg Revenue beat(4)-0.81%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.03%
Revenue beat(8)2
Avg Revenue beat(8)-0.64%
Revenue beat(12)3
Avg Revenue beat(12)-0.73%
Revenue beat(16)6
Avg Revenue beat(16)-0.24%
PT rev (1m)-2.32%
PT rev (3m)-3.03%
EPS NQ rev (1m)6.07%
EPS NQ rev (3m)6.07%
EPS NY rev (1m)0.36%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)4.48%
Revenue NQ rev (3m)4.48%
Revenue NY rev (1m)1.22%
Revenue NY rev (3m)1.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.2 | ||
| Fwd PE | 35.68 | ||
| P/S | 15.32 | ||
| P/FCF | 51.14 | ||
| P/OCF | 46.94 | ||
| P/B | 14.82 | ||
| P/tB | 40.44 | ||
| EV/EBITDA | 42.39 |
EPS(TTM)7.14
EY2.43%
EPS(NY)8.24
Fwd EY2.8%
FCF(TTM)5.75
FCFY1.96%
OCF(TTM)6.27
OCFY2.13%
SpS19.2
BVpS19.84
TBVpS7.27
PEG (NY)2.67
PEG (5Y)1.99
Graham Number56.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.92% | ||
| ROE | 20.26% | ||
| ROCE | 19.5% | ||
| ROIC | 14.48% | ||
| ROICexc | 23% | ||
| ROICexgc | 65.08% | ||
| OM | 31.36% | ||
| PM (TTM) | 20.94% | ||
| GM | 86.36% | ||
| FCFM | 29.96% |
ROA(3y)13.68%
ROA(5y)14.69%
ROE(3y)24.47%
ROE(5y)25.95%
ROIC(3y)17.13%
ROIC(5y)17.76%
ROICexc(3y)25.61%
ROICexc(5y)25.63%
ROICexgc(3y)70.1%
ROICexgc(5y)64.45%
ROCE(3y)23.08%
ROCE(5y)24.07%
ROICexgc growth 3Y1.82%
ROICexgc growth 5Y10.8%
ROICexc growth 3Y-4.26%
ROICexc growth 5Y1.27%
OM growth 3Y1.71%
OM growth 5Y5.38%
PM growth 3Y-4.23%
PM growth 5Y-1%
GM growth 3Y-1.21%
GM growth 5Y-0.51%
F-Score7
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 1.56 | ||
| Debt/EBITDA | 1.31 | ||
| Cap/Depr | 62.27% | ||
| Cap/Sales | 2.68% | ||
| Interest Coverage | 14.84 | ||
| Cash Conversion | 91.51% | ||
| Profit Quality | 143.11% | ||
| Current Ratio | 2.86 | ||
| Quick Ratio | 2.67 | ||
| Altman-Z | 12.78 |
F-Score7
WACC10.81%
ROIC/WACC1.34
Cap/Depr(3y)68.4%
Cap/Depr(5y)69.25%
Cap/Sales(3y)2.75%
Cap/Sales(5y)2.8%
Profit Quality(3y)122.92%
Profit Quality(5y)129.8%
High Growth Momentum
Growth
EPS 1Y (TTM)19.6%
EPS 3Y18.69%
EPS 5Y20.68%
EPS Q2Q%5.85%
EPS Next Y15.46%
EPS Next 2Y15.17%
EPS Next 3Y13.6%
EPS Next 5Y14.49%
Revenue 1Y (TTM)14.12%
Revenue growth 3Y14.14%
Revenue growth 5Y14.57%
Sales Q2Q%6.2%
Revenue Next Year13.87%
Revenue Next 2Y13.12%
Revenue Next 3Y13.02%
Revenue Next 5Y12.98%
EBIT growth 1Y19.58%
EBIT growth 3Y16.1%
EBIT growth 5Y20.74%
EBIT Next Year21.71%
EBIT Next 3Y15.52%
EBIT Next 5Y15.44%
FCF growth 1Y41.94%
FCF growth 3Y12.39%
FCF growth 5Y14.39%
OCF growth 1Y37.14%
OCF growth 3Y11.66%
OCF growth 5Y13.82%
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 7 / 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 8 / 10.