CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
NASDAQ:CDNS • US1273871087
303.36 USD
+1.96 (+0.65%)
At close: Mar 2, 2026
302.01 USD
-1.35 (-0.45%)
After Hours: 3/2/2026, 8:07:02 PM
We assign a fundamental rating of 7 out of 10 to CDNS. CDNS was compared to 276 industry peers in the Software industry. CDNS has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CDNS is valued quite expensively, but it does show have an excellent growth rating. These ratings would make CDNS suitable for growth and quality investing!
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.
- In the past 5 years CDNS has always been profitable.
- In the past 5 years CDNS always reported a positive cash flow from operatings.
1.2 Ratios
- CDNS has a better Return On Assets (10.92%) than 86.96% of its industry peers.
- CDNS has a Return On Equity of 20.26%. This is amongst the best in the industry. CDNS outperforms 86.96% of its industry peers.
- CDNS's Return On Invested Capital of 14.48% is amongst the best of the industry. CDNS outperforms 91.67% of its industry peers.
- CDNS had an Average Return On Invested Capital over the past 3 years of 17.13%. This is significantly above the industry average of 10.80%.
| 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's Profit Margin of 20.94% is amongst the best of the industry. CDNS outperforms 86.96% of its industry peers.
- CDNS's Profit Margin has been stable in the last couple of years.
- CDNS has a Operating Margin of 31.36%. This is amongst the best in the industry. CDNS outperforms 94.93% of its industry peers.
- In the last couple of years the Operating Margin of CDNS has grown nicely.
- CDNS has a Gross Margin of 86.36%. This is amongst the best in the industry. CDNS outperforms 92.39% of its industry peers.
- 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
- CDNS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, CDNS has less shares outstanding
- Compared to 5 years ago, CDNS has less shares outstanding
- 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 Altman-Z score of 12.92. This is amongst the best in the industry. CDNS outperforms 94.57% 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.
- The Debt to FCF ratio of CDNS (1.56) is better than 70.29% 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.
- The Debt to Equity ratio of CDNS (0.45) is worse than 64.86% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 1.56 | ||
| Altman-Z | 12.92 |
ROIC/WACC1.34
WACC10.8%
2.3 Liquidity
- A Current Ratio of 2.86 indicates that CDNS has no problem at all paying its short term obligations.
- With a decent Current ratio value of 2.86, CDNS is doing good in the industry, outperforming 72.46% of the companies in the same industry.
- 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.
- Looking at the Quick ratio, with a value of 2.67, CDNS is in the better half of the industry, outperforming 71.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.86 | ||
| Quick Ratio | 2.67 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 19.60% over the past year.
- CDNS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.68% yearly.
- 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
- A Price/Earnings ratio of 42.49 indicates a quite expensive valuation of CDNS.
- 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 27.13.
- Based on the Price/Forward Earnings ratio of 36.93, the valuation of CDNS can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CDNS is on the same level as its industry peers.
- CDNS is valuated rather expensively when we compare the Price/Forward Earnings ratio to 28.11, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.49 | ||
| Fwd PE | 36.93 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CDNS is valued a bit cheaper than the industry average as 60.14% of the companies are valued more expensively.
- CDNS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 52.03 | ||
| 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.
- The excellent profitability rating of CDNS may justify a higher PE ratio.
- CDNS's earnings are expected to grow with 12.44% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.82
PEG (5Y)2.05
EPS Next 2Y14.83%
EPS Next 3Y12.44%
5. Dividend
5.1 Amount
- CDNS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
303.36
+1.96 (+0.65%)
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 Cap82.57B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts81.88
Price Target379.71 (25.17%)
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 | 42.49 | ||
| Fwd PE | 36.93 | ||
| P/S | 15.59 | ||
| P/FCF | 52.03 | ||
| P/OCF | 47.76 | ||
| P/B | 15.08 | ||
| P/tB | 41.15 | ||
| EV/EBITDA | 42.99 |
EPS(TTM)7.14
EY2.35%
EPS(NY)8.21
Fwd EY2.71%
FCF(TTM)5.83
FCFY1.92%
OCF(TTM)6.35
OCFY2.09%
SpS19.46
BVpS20.11
TBVpS7.37
PEG (NY)2.82
PEG (5Y)2.05
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
WACC10.8%
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.