CADENCE DESIGN SYS INC (CDNS) Fundamental Analysis & Valuation

NASDAQ:CDNS • US1273871087

Current stock price

293.75 USD
+1.03 (+0.35%)
At close:
293.75 USD
0 (0%)
After Hours:

This CDNS fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

9

1. CDNS Profitability Analysis

1.1 Basic Checks

  • CDNS had positive earnings in the past year.
  • CDNS had a positive operating cash flow in the past year.
  • Each year in the past 5 years CDNS has been profitable.
  • Each year in the past 5 years CDNS had a positive operating cash flow.
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 2025 500M 1B 1.5B

1.2 Ratios

  • The Return On Assets of CDNS (10.92%) is better than 87.00% of its industry peers.
  • The Return On Equity of CDNS (20.26%) is better than 87.00% of its industry peers.
  • CDNS has a Return On Invested Capital of 14.48%. This is amongst the best in the industry. CDNS outperforms 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 10.87%.
Industry RankSector 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%
CDNS Yearly ROA, ROE, ROICCDNS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

1.3 Margins

  • CDNS has a better Profit Margin (20.94%) than 87.73% 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 94.95% of its industry peers.
  • In the last couple of years the Operating Margin of CDNS has grown nicely.
  • The Gross Margin of CDNS (86.36%) is better than 92.78% of its industry peers.
  • CDNS's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
CDNS Yearly Profit, Operating, Gross MarginsCDNS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60 80

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ROAROEROICOperating and Profit MarginShow most profitable peers

8

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.
CDNS Yearly Shares OutstandingCDNS Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 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 2025 2B 4B 6B 8B 10B

2.2 Solvency

  • An Altman-Z score of 12.75 indicates that CDNS is not in any danger for bankruptcy at the moment.
  • With an excellent Altman-Z score value of 12.75, CDNS belongs to the best of the industry, outperforming 93.86% of the companies in the same industry.
  • 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.
  • CDNS has a Debt to FCF ratio of 1.56. This is in the better half of the industry: CDNS outperforms 70.04% 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's Debt to Equity ratio of 0.45 is on the low side compared to the rest of the industry. CDNS is outperformed by 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 RankSector Rank
Debt/Equity 0.45
Debt/FCF 1.56
Altman-Z 12.75
ROIC/WACC1.35
WACC10.75%
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 2025 1B 2B 3B 4B 5B

2.3 Liquidity

  • A Current Ratio of 2.86 indicates that CDNS has no problem at all paying its short term obligations.
  • Looking at the Current ratio, with a value of 2.86, CDNS is in the better half of 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.
  • With a decent Quick ratio value of 2.67, CDNS is doing good in the industry, outperforming 71.12% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.86
Quick Ratio 2.67
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 2025 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. CDNS Growth Analysis

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%.
  • The Revenue has been growing by 14.57% on average over the past years. This is quite good.
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.
  • 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.
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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3

4. CDNS Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 41.14, the valuation of CDNS can be described as expensive.
  • CDNS's Price/Earnings is on the same level as the industry average.
  • CDNS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.96.
  • Based on the Price/Forward Earnings ratio of 35.63, the valuation of CDNS can be described as expensive.
  • The rest of the industry has a similar Price/Forward Earnings ratio as CDNS.
  • Compared to an average S&P500 Price/Forward Earnings ratio of 24.04, CDNS is valued a bit more expensive.
Industry RankSector Rank
PE 41.14
Fwd PE 35.63
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

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CDNS indicates a somewhat cheap valuation: CDNS is cheaper than 61.01% of the companies listed in the same industry.
  • CDNS's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 51.07
EV/EBITDA 42.31
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 13.60% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.66
PEG (5Y)1.99
EPS Next 2Y15.17%
EPS Next 3Y13.6%

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

0

5. CDNS Dividend Analysis

5.1 Amount

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

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Find the best dividend stocksShow peers with best dividend

CDNS Fundamentals: All Metrics, Ratios and Statistics

CADENCE DESIGN SYS INC

NASDAQ:CDNS (3/17/2026, 3:42:23 PM)

After market: 293.75 0 (0%)

293.75

+1.03 (+0.35%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-17
Earnings (Next)04-27
Inst Owners89.74%
Inst Owner Change3.04%
Ins Owners0.24%
Ins Owner Change-1.43%
Market Cap81.04B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts83.13
Price Target379.71 (29.26%)
Short Float %1.93%
Short Ratio2.03
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)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)6.2%
EPS NQ rev (3m)6.2%
EPS NY rev (1m)0.36%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)4.55%
Revenue NQ rev (3m)4.55%
Revenue NY rev (1m)1.22%
Revenue NY rev (3m)1.22%
Valuation
Industry RankSector Rank
PE 41.14
Fwd PE 35.63
P/S 15.3
P/FCF 51.07
P/OCF 46.88
P/B 14.8
P/tB 40.38
EV/EBITDA 42.31
EPS(TTM)7.14
EY2.43%
EPS(NY)8.24
Fwd EY2.81%
FCF(TTM)5.75
FCFY1.96%
OCF(TTM)6.27
OCFY2.13%
SpS19.2
BVpS19.84
TBVpS7.27
PEG (NY)2.66
PEG (5Y)1.99
Graham Number56.46
Profitability
Industry RankSector 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 RankSector 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 12.75
F-Score7
WACC10.75%
ROIC/WACC1.35
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 Fundamental Analysis 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.