CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
NASDAQ:CDNS • US1273871087
301.4 USD
+3.8 (+1.28%)
At close: Feb 27, 2026
300.6 USD
-0.8 (-0.27%)
After Hours: 2/27/2026, 8:00:02 PM
Overall CDNS gets a fundamental rating of 7 out of 10. We evaluated CDNS against 276 industry peers in the Software industry. Both the health and profitability get an excellent rating, making CDNS a very profitable company, without any liquidiy or solvency issues. CDNS is valued quite expensive, but it does show an excellent growth. This makes CDNS very considerable for growth and quality 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.
- CDNS had positive earnings in each of the past 5 years.
- Each year in the past 5 years CDNS had a positive operating cash flow.
1.2 Ratios
- CDNS has a better Return On Assets (10.92%) than 86.59% of its industry peers.
- CDNS's Return On Equity of 20.26% is amongst the best of the industry. CDNS outperforms 87.32% of its industry peers.
- CDNS's Return On Invested Capital of 14.48% is amongst the best of the industry. CDNS outperforms 92.03% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CDNS is significantly above the industry average of 10.73%.
| 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 has a better Profit Margin (20.94%) than 86.96% of its industry peers.
- CDNS's Profit Margin has been stable in the last couple of years.
- With an excellent Operating Margin value of 31.36%, CDNS belongs to the best of the industry, outperforming 94.93% of the companies in the same industry.
- In the last couple of years the Operating Margin of CDNS has grown nicely.
- With an excellent Gross Margin value of 86.36%, CDNS belongs to the best of the industry, outperforming 92.39% 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.
- The number of shares outstanding for CDNS has been reduced compared to 1 year ago.
- The number of shares outstanding for CDNS has been reduced compared to 5 years ago.
- CDNS has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 12.92 indicates that CDNS is not in any danger for bankruptcy at the moment.
- CDNS has a better Altman-Z score (12.92) than 94.57% 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.
- CDNS has a better Debt to FCF ratio (1.56) than 70.29% of its industry peers.
- A Debt/Equity ratio of 0.45 indicates that CDNS is not too dependend on debt financing.
- With a Debt to Equity ratio value of 0.45, CDNS is not doing good in the industry: 64.86% 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 | 0.45 | ||
| Debt/FCF | 1.56 | ||
| Altman-Z | 12.92 |
ROIC/WACC1.34
WACC10.81%
2.3 Liquidity
- A Current Ratio of 2.86 indicates that CDNS has no problem at all paying its short term obligations.
- CDNS has a better Current ratio (2.86) than 72.46% of its industry peers.
- A Quick Ratio of 2.67 indicates that CDNS has no problem at all paying its short term obligations.
- CDNS's Quick ratio of 2.67 is fine compared to the rest of the industry. CDNS outperforms 71.38% 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.
- The Earnings Per Share has been growing by 20.68% on average over the past years. This is a very strong growth
- CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.12%.
- Measured over the past years, CDNS shows a quite strong growth in Revenue. The Revenue has been growing by 14.57% on average per year.
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
- Based on estimates for the next years, CDNS will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.49% on average per year.
- 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 Y15.05%
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
- With a Price/Earnings ratio of 42.21, CDNS can be considered very expensive at the moment.
- 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 27.07, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 36.69, which means the current valuation is very expensive for CDNS.
- 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 28.05.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.21 | ||
| Fwd PE | 36.69 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CDNS is valued a bit cheaper than 60.51% of the companies in the same industry.
- 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 | 51.7 | ||
| EV/EBITDA | 42.99 |
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.
- A more expensive valuation may be justified as CDNS's earnings are expected to grow with 12.44% in the coming years.
PEG (NY)2.81
PEG (5Y)2.04
EPS Next 2Y14.83%
EPS Next 3Y12.44%
5. Dividend
5.1 Amount
- No dividends for CDNS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
301.4
+3.8 (+1.28%)
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 Change3.04%
Ins Owners0.25%
Ins Owner Change-1.5%
Market Cap82.04B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts81.88
Price Target379.71 (25.98%)
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)-2.52%
PT rev (3m)-2.4%
EPS NQ rev (1m)6.96%
EPS NQ rev (3m)6.98%
EPS NY rev (1m)-0.01%
EPS NY rev (3m)0.26%
Revenue NQ rev (1m)4.34%
Revenue NQ rev (3m)4.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.21 | ||
| Fwd PE | 36.69 | ||
| P/S | 15.49 | ||
| P/FCF | 51.7 | ||
| P/OCF | 47.46 | ||
| P/B | 14.99 | ||
| P/tB | 40.88 | ||
| EV/EBITDA | 42.99 |
EPS(TTM)7.14
EY2.37%
EPS(NY)8.21
Fwd EY2.73%
FCF(TTM)5.83
FCFY1.93%
OCF(TTM)6.35
OCFY2.11%
SpS19.46
BVpS20.11
TBVpS7.37
PEG (NY)2.81
PEG (5Y)2.04
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 | 12.92 |
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 Y15.05%
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 Year21.92%
EBIT Next 3Y16.03%
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.