CADENCE DESIGN SYS INC (CDNS) Fundamental Analysis & Valuation

NASDAQ:CDNS • US1273871087

Current stock price

278.72 USD
-1.47 (-0.52%)
At close:
278.72 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.
  • CDNS had a positive operating cash flow in each 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 2025 500M 1B 1.5B

1.2 Ratios

  • The Return On Assets of CDNS (10.92%) is better than 87.27% of its industry peers.
  • CDNS has a Return On Equity of 20.26%. This is amongst the best in the industry. CDNS outperforms 86.55% of its industry peers.
  • The Return On Invested Capital of CDNS (14.48%) is better than 92.00% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for CDNS is significantly above the industry average of 10.93%.
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

  • The Profit Margin of CDNS (20.94%) is better than 88.36% 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 94.91% of its industry peers.
  • CDNS's Operating Margin has improved in the last couple of years.
  • CDNS's Gross Margin of 86.36% is amongst the best of the industry. CDNS outperforms 92.73% 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 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

  • 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
  • CDNS has less shares outstanding than it did 5 years ago.
  • Compared to 1 year ago, CDNS has an improved debt to assets ratio.
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

  • CDNS has an Altman-Z score of 12.26. This indicates that CDNS is financially healthy and has little risk of bankruptcy at the moment.
  • The Altman-Z score of CDNS (12.26) is better than 93.82% 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.
  • With a decent Debt to FCF ratio value of 1.56, CDNS is doing good in the industry, outperforming 68.73% of the companies in the same industry.
  • A Debt/Equity ratio of 0.45 indicates that CDNS is not too dependend on debt financing.
  • The Debt to Equity ratio of CDNS (0.45) is worse than 64.36% of its industry peers.
  • Although CDNS's pure debt/equity ratio does not look good, it has limited outstanding debt compared to the Free Cash Flow. 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 RankSector Rank
Debt/Equity 0.45
Debt/FCF 1.56
Altman-Z 12.26
ROIC/WACC1.32
WACC10.95%
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

  • 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.
  • With a decent Current ratio value of 2.86, CDNS is doing good in the industry, outperforming 73.45% 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.
  • CDNS has a better Quick ratio (2.67) than 72.00% of its industry peers.
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.
  • 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.
  • CDNS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.12%.
  • 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

  • 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.
  • Based on estimates for the next years, CDNS will show a quite strong growth in Revenue. The Revenue will grow by 12.98% on average per year.
EPS Next Y15.46%
EPS Next 2Y15.17%
EPS Next 3Y13.6%
EPS Next 5Y14.49%
Revenue Next Year14.05%
Revenue Next 2Y13.22%
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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Find the best growth stocksShow best growing peers

3

4. CDNS Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 39.04, CDNS can be considered very expensive at the moment.
  • CDNS's Price/Earnings ratio is in line with the industry average.
  • CDNS is valuated expensively when we compare the Price/Earnings ratio to 25.60, which is the current average of the S&P500 Index.
  • CDNS is valuated quite expensively with a Price/Forward Earnings ratio of 33.81.
  • 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 22.84, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 39.04
Fwd PE 33.81
CDNS Price Earnings VS Forward Price EarningsCDNS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, CDNS is valued a bit cheaper than 61.09% of the companies in the same industry.
  • CDNS's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 48.45
EV/EBITDA 40.26
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.
  • The excellent profitability rating of CDNS may justify a higher PE ratio.
  • A more expensive valuation may be justified as CDNS's earnings are expected to grow with 13.60% in the coming years.
PEG (NY)2.53
PEG (5Y)1.89
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 (4/2/2026, 8:12:40 PM)

After market: 278.72 0 (0%)

278.72

-1.47 (-0.52%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-17
Earnings (Next)04-27
Inst Owners89.74%
Inst Owner Change0%
Ins Owners0.24%
Ins Owner Change8.16%
Market Cap76.89B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts83.13
Price Target378.65 (35.85%)
Short Float %2.26%
Short Ratio2.31
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)-0.28%
PT rev (3m)-3.03%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)6.09%
EPS NY rev (1m)0%
EPS NY rev (3m)0.45%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)4.62%
Revenue NY rev (1m)0.16%
Revenue NY rev (3m)1.39%
Valuation
Industry RankSector Rank
PE 39.04
Fwd PE 33.81
P/S 14.52
P/FCF 48.45
P/OCF 44.48
P/B 14.05
P/tB 38.32
EV/EBITDA 40.26
EPS(TTM)7.14
EY2.56%
EPS(NY)8.24
Fwd EY2.96%
FCF(TTM)5.75
FCFY2.06%
OCF(TTM)6.27
OCFY2.25%
SpS19.2
BVpS19.84
TBVpS7.27
PEG (NY)2.53
PEG (5Y)1.89
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 12.26
F-Score7
WACC10.95%
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 Y15.46%
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 Year14.05%
Revenue Next 2Y13.22%
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.


How profitable is CADENCE DESIGN SYS INC (CDNS) stock?

CADENCE DESIGN SYS INC (CDNS) has a profitability rating of 9 / 10.


What is the financial health of CADENCE DESIGN SYS INC (CDNS) stock?

The financial health rating of CADENCE DESIGN SYS INC (CDNS) is 8 / 10.


What is the earnings growth outlook for CADENCE DESIGN SYS INC?

The Earnings per Share (EPS) of CADENCE DESIGN SYS INC (CDNS) is expected to grow by 15.46% in the next year.