CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis

NASDAQ:CDNS • US1273871087

296.28 USD
-0.31 (-0.1%)
At close: Feb 20, 2026
295.602 USD
-0.68 (-0.23%)
After Hours: 2/20/2026, 8:21:37 PM
Overview Stock Chart Technical Analysis Fundamental Analysis Analyst Ratings Earnings Estimates Financials Ownership News
Fundamental Rating

5

Overall CDNS gets a fundamental rating of 5 out of 10. We evaluated CDNS against 276 industry peers in the Software industry. CDNS scores excellent on profitability, but there are some minor concerns on its financial health. While showing a medium growth rate, CDNS is valued expensive at the moment.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

  • CDNS had positive earnings in the past year.
  • CDNS had a positive operating cash flow in the past year.
  • Of the past 5 years CDNS 4 years were profitable.
  • CDNS had a positive operating cash flow in 4 of the past 5 years.
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'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 87.68% of its industry peers.
  • CDNS's Return On Invested Capital of 15.75% is amongst the best of the industry. CDNS outperforms 92.39% 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 10.64%.
  • 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 84.78% of its industry peers.
  • In the last couple of years the Profit Margin of CDNS has declined.
  • Looking at the Operating Margin, with a value of 31.57%, CDNS belongs to the top of the industry, outperforming 93.12% of the companies in the same industry.
  • 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 92.39% of its industry peers.
  • 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

More info and screens

ROAROEROICOperating and Profit MarginShow most profitable peers

6

2. Health

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CDNS is creating value.
  • There is no outstanding debt for CDNS. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
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's Debt to FCF ratio of 1.68 is fine compared to the rest of the industry. CDNS outperforms 69.57% of its industry peers.
  • A Debt/Equity ratio of 0.48 indicates that CDNS is not too dependend on debt financing.
  • CDNS has a Debt to Equity ratio of 0.48. This is in the lower half of the industry: CDNS underperforms 66.30% 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 RankSector Rank
Debt/Equity 0.48
Debt/FCF 1.68
Altman-Z N/A
ROIC/WACC1.44
WACC10.94%
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 75.00% 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.
  • With a decent Quick ratio value of 2.84, CDNS is doing good in the industry, outperforming 74.28% of the companies in the same industry.
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

More info and screens

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

4

3. Growth

3.1 Past

  • The Earnings Per Share has grown by an nice 19.60% over the past year.
  • The Earnings Per Share has been growing by 20.68% on average over the past years. This is a very strong growth
EPS 1Y (TTM)19.6%
EPS 3Y18.69%
EPS 5Y20.68%
EPS Q2Q%5.85%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
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.
  • 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.
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

More info and screens

Find the best growth stocksShow best growing peers

2

4. Valuation

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 41.50, 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 26.99. CDNS is valued rather expensively when compared to this.
  • Based on the Price/Forward Earnings ratio of 36.07, the valuation of CDNS can be described as expensive.
  • CDNS's Price/Forward Earnings is on the same level as the industry average.
  • CDNS is valuated rather expensively when we compare the Price/Forward Earnings ratio to 28.06, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 41.5
Fwd PE 36.07
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

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as CDNS.
  • The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
Industry RankSector Rank
P/FCF 54.54
EV/EBITDA 43.13
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 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)2.76
PEG (5Y)2.01
EPS Next 2Y14.83%
EPS Next 3Y12.44%

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 (2/20/2026, 8:21:37 PM)

After market: 295.602 -0.68 (-0.23%)

296.28

-0.31 (-0.1%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-17
Earnings (Next)04-27
Inst Owners91.74%
Inst Owner Change2.99%
Ins Owners0.25%
Ins Owner Change-1.5%
Market Cap80.65B
Revenue(TTM)N/A
Net Income(TTM)1.06B
Analysts81.88
Price Target388.73 (31.2%)
Short Float %1.63%
Short Ratio2.17
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)-0.21%
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 RankSector Rank
PE 41.5
Fwd PE 36.07
P/S 15.47
P/FCF 54.54
P/OCF 49.89
P/B 15.51
P/tB 42.86
EV/EBITDA 43.13
EPS(TTM)7.14
EY2.41%
EPS(NY)8.21
Fwd EY2.77%
FCF(TTM)5.43
FCFY1.83%
OCF(TTM)5.94
OCFY2%
SpS19.15
BVpS19.1
TBVpS6.91
PEG (NY)2.76
PEG (5Y)2.01
Graham Number55.39
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
WACC10.94%
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)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)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%6.2%
Revenue Next Year12.49%
Revenue Next 2Y12.42%
Revenue Next 3Y11.73%
Revenue Next 5Y12.98%
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 5 / 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 8 / 10.


How financially healthy is CADENCE DESIGN SYS INC?

The financial health rating of CADENCE DESIGN SYS INC (CDNS) is 6 / 10.