CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
NASDAQ:CDNS • US1273871087
279.8 USD
-16.48 (-5.56%)
At close: Feb 23, 2026
279.8 USD
0 (0%)
After Hours: 2/23/2026, 5:20:02 PM
CDNS gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 274 industry peers in the Software industry. CDNS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CDNS shows excellent growth, but is valued quite expensive already. These ratings would make CDNS suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
- In the past year CDNS was profitable.
- In the past year CDNS had a positive cash flow from operations.
- 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 86.13% of the companies in the same industry.
- With an excellent Return On Equity value of 20.26%, CDNS belongs to the best of the industry, outperforming 87.59% of the companies in the same industry.
- The Return On Invested Capital of CDNS (14.48%) is better than 91.97% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 10.69%.
| 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
- The Profit Margin of CDNS (20.94%) is better than 85.04% of its industry peers.
- CDNS's Profit Margin has been stable in the last couple of years.
- CDNS has a better Operating Margin (31.36%) than 93.07% of its industry peers.
- CDNS's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 86.36%, CDNS belongs to the top of the industry, outperforming 92.70% of the companies in the same industry.
- 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. Health
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 12.74. This indicates that CDNS is financially healthy and has little risk of bankruptcy at the moment.
- CDNS has a better Altman-Z score (12.74) than 94.16% of its industry peers.
- The Debt to FCF ratio of CDNS is 1.56, which is an excellent value as it means it would take CDNS, only 1.56 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1.56, CDNS is in the better half of the industry, outperforming 70.44% of the companies in the same industry.
- 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 worse Debt to Equity ratio (0.45) than 65.69% 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 | 0.45 | ||
| Debt/FCF | 1.56 | ||
| Altman-Z | 12.74 |
ROIC/WACC1.32
WACC10.94%
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.
- CDNS has a better Current ratio (2.86) than 74.09% of its industry peers.
- CDNS has a Quick Ratio of 2.67. This indicates that CDNS is financially healthy and has no problem in meeting its short term obligations.
- CDNS's Quick ratio of 2.67 is fine compared to the rest of the industry. CDNS outperforms 72.99% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.86 | ||
| Quick Ratio | 2.67 |
3. Growth
3.1 Past
- CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 19.60%, which is quite good.
- 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.
- Looking at the last year, CDNS shows a quite strong growth in Revenue. The Revenue has grown by 14.12% in the last year.
- 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
- The Earnings Per Share is expected to grow by 14.49% on average over the next years. This is quite good.
- The Revenue is expected to grow by 12.98% on average over the next years. This is quite good.
EPS Next Y15.05%
EPS Next 2Y14.83%
EPS Next 3Y12.44%
EPS Next 5Y14.49%
Revenue Next Year12.49%
Revenue Next 2Y12.42%
Revenue Next 3Y11.73%
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. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 39.19, the valuation of CDNS can be described as expensive.
- CDNS's Price/Earnings ratio is in line with the industry average.
- The average S&P500 Price/Earnings ratio is at 26.99. CDNS is valued slightly more expensive when compared to this.
- With a Price/Forward Earnings ratio of 34.06, CDNS can be considered very expensive at the moment.
- The rest of the industry has a similar Price/Forward Earnings ratio as CDNS.
- CDNS's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.02.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.19 | ||
| Fwd PE | 34.06 |
4.2 Price Multiples
- CDNS's Enterprise Value to EBITDA ratio is in line with the industry average.
- 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 | 47.99 | ||
| EV/EBITDA | 42.25 |
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 12.44% in the coming years.
PEG (NY)2.6
PEG (5Y)1.9
EPS Next 2Y14.83%
EPS Next 3Y12.44%
5. Dividend
5.1 Amount
- No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
279.8
-16.48 (-5.56%)
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 Owners91.74%
Inst Owner Change2.99%
Ins Owners0.25%
Ins Owner Change-1.5%
Market Cap76.16B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts81.88
Price Target388.73 (38.93%)
Short Float %1.63%
Short Ratio2.17
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)-0.21%
PT rev (3m)-0.08%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.13%
EPS NY rev (1m)-0.01%
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 | 39.19 | ||
| Fwd PE | 34.06 | ||
| P/S | 14.38 | ||
| P/FCF | 47.99 | ||
| P/OCF | 44.06 | ||
| P/B | 13.91 | ||
| P/tB | 37.95 | ||
| EV/EBITDA | 42.25 |
EPS(TTM)7.14
EY2.55%
EPS(NY)8.21
Fwd EY2.94%
FCF(TTM)5.83
FCFY2.08%
OCF(TTM)6.35
OCFY2.27%
SpS19.46
BVpS20.11
TBVpS7.37
PEG (NY)2.6
PEG (5Y)1.9
Graham Number56.84
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 | 12.74 |
F-Score7
WACC10.94%
ROIC/WACC1.32
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 Y15.05%
EPS Next 2Y14.83%
EPS Next 3Y12.44%
EPS Next 5Y14.49%
Revenue 1Y (TTM)14.12%
Revenue growth 3Y14.14%
Revenue growth 5Y14.57%
Sales Q2Q%6.2%
Revenue Next Year12.49%
Revenue Next 2Y12.42%
Revenue Next 3Y11.73%
Revenue Next 5Y12.98%
EBIT growth 1Y19.58%
EBIT growth 3Y16.1%
EBIT growth 5Y20.74%
EBIT Next Year20.49%
EBIT Next 3Y17.08%
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 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 8 / 10.