CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis

USA • Nasdaq • NASDAQ:CDNS • US1273871087

283.52 USD
+13.38 (+4.95%)
At close: Feb 6, 2026
284 USD
+0.48 (+0.17%)
After Hours: 2/6/2026, 8:22:23 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

6

CDNS gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 278 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. These ratings could make CDNS a good candidate for growth investing.


Dividend Valuation Growth Profitability Health

9

1. Profitability

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.
  • In the past 5 years CDNS always reported a positive cash flow from operatings.
CDNS Yearly Net Income VS EBIT VS OCF VS FCFCDNS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B

1.2 Ratios

  • CDNS has a better Return On Assets (11.05%) than 86.33% of its industry peers.
  • The Return On Equity of CDNS (20.41%) is better than 87.77% of its industry peers.
  • CDNS has a Return On Invested Capital of 15.75%. This is amongst the best in the industry. CDNS outperforms 92.81% 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 10.78%.
  • 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 RankSector 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%
CDNS Yearly ROA, ROE, ROICCDNS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

1.3 Margins

  • CDNS has a better Profit Margin (20.35%) than 84.89% of its industry peers.
  • CDNS's Profit Margin has declined in the last couple of years.
  • CDNS's Operating Margin of 31.57% is amongst the best of the industry. CDNS outperforms 92.81% of its industry peers.
  • CDNS's Operating Margin has improved in the last couple of years.
  • With an excellent Gross Margin value of 85.55%, CDNS belongs to the best of the industry, outperforming 92.81% of the companies in the same industry.
  • CDNS's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
CDNS Yearly Profit, Operating, Gross MarginsCDNS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

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ROAROEROICOperating and Profit MarginShow most profitable peers

6

2. Health

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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.
CDNS Yearly Shares OutstandingCDNS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M 250M
CDNS Yearly Total Debt VS Total AssetsCDNS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

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 70.14% 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.
  • CDNS has a Debt to Equity ratio of 0.48. This is in the lower half of the industry: CDNS underperforms 65.47% 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 RankSector Rank
Debt/Equity 0.48
Debt/FCF 1.68
Altman-Z N/A
ROIC/WACC1.44
WACC10.95%
CDNS Yearly LT Debt VS Equity VS FCFCDNS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B

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 75.18% 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 better Quick ratio (2.84) than 74.46% of its industry peers.
Industry RankSector Rank
Current Ratio 3.05
Quick Ratio 2.84
CDNS Yearly Current Assets VS Current LiabilitesCDNS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

7

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.
  • The Earnings Per Share has been growing by 22.21% on average over the past years. This is a very strong growth
  • The Revenue has grown by 19.72% in the past year. This is quite good.
  • The Revenue has been growing by 14.72% on average over the past years. This is quite good.
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

  • CDNS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.14% yearly.
  • 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 Y20.59%
EPS Next 2Y17.31%
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

  • The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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.
CDNS Yearly Revenue VS EstimatesCDNS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2B 4B 6B 8B 10B
CDNS Yearly EPS VS EstimatesCDNS Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 5 10 15 20

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Find the best growth stocksShow best growing peers

3

4. Valuation

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 40.33, CDNS can be considered very expensive at the moment.
  • CDNS's Price/Earnings is on the same level as the industry average.
  • CDNS's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.92.
  • With a Price/Forward Earnings ratio of 34.51, CDNS can be considered very expensive at the moment.
  • CDNS's Price/Forward Earnings is on the same level as the industry average.
  • CDNS's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 27.78.
Industry RankSector Rank
PE 40.33
Fwd PE 34.51
CDNS Price Earnings VS Forward Price EarningsCDNS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

  • CDNS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDNS is cheaper than 60.43% of the companies in the same industry.
  • The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
Industry RankSector Rank
P/FCF 52.19
EV/EBITDA 39.31
CDNS Per share dataCDNS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15

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.
  • CDNS's earnings are expected to grow with 16.39% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.96
PEG (5Y)1.82
EPS Next 2Y17.31%
EPS Next 3Y16.39%

More info and screens

Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

0

5. Dividend

5.1 Amount

  • No dividends for CDNS!.
Industry RankSector Rank
Dividend Yield 0%

More info and screens

Find the best dividend stocksShow peers with best dividend

CADENCE DESIGN SYS INC

NASDAQ:CDNS (2/6/2026, 8:22:23 PM)

After market: 284 +0.48 (+0.17%)

283.52

+13.38 (+4.95%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)10-27
Earnings (Next)02-17
Inst Owners91.74%
Inst Owner Change-2.32%
Ins Owners0.25%
Ins Owner Change-1.64%
Market Cap77.17B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts81.88
Price Target388.73 (37.11%)
Short Float %1.62%
Short Ratio2.56
Dividend
Industry RankSector 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)-0.24%
PT rev (3m)1.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.17%
EPS NY rev (1m)0.13%
EPS NY rev (3m)3.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.65%
Valuation
Industry RankSector Rank
PE 40.33
Fwd PE 34.51
P/S 14.81
P/FCF 52.19
P/OCF 47.74
P/B 14.84
P/tB 41.02
EV/EBITDA 39.31
EPS(TTM)7.03
EY2.48%
EPS(NY)8.22
Fwd EY2.9%
FCF(TTM)5.43
FCFY1.92%
OCF(TTM)5.94
OCFY2.09%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)1.96
PEG (5Y)1.82
Graham Number54.96
Profitability
Industry RankSector 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 RankSector 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
WACC10.95%
ROIC/WACC1.44
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 Y20.59%
EPS Next 2Y17.31%
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 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.