Cadence Design Systems Inc (CDNS)
Information Technology · Application Software · US stock · S&P 500 component
$309.65
▼ -16.42 (5.04%)
Fair valueFair
$299 −3.4% to fair value
$150fair band $255–$363$449
Day's range
$306.39 – $319.47
52-week range
$262.75 – $416.69
About Cadence Design Systems Inc
Cadence Design Systems provides software, hardware and intellectual property used to design chips, circuit boards and electronic systems. Engineers at semiconductor makers, technology companies, carmakers and other electronics firms use its tools to design, simulate and verify products before manufacturing. The offering spans digital and analog chip design, system analysis and reusable design blocks, used in areas such as data centres, mobile devices and vehicles.
Cadence earns revenue from software licences, subscriptions and maintenance, from hardware systems used to test chip designs, and from licensing design blocks and providing services. The last twelve months brought in $5.5 billion, and growth over the last three years was 14.1% a year. The operating margin is 28.3%, and the business earns a profit of 22% on the capital invested in it. No dividend is paid. On the site's X-Ray Score it receives 49 out of 100.
Price chart
52-wk range $262.75 – $416.69Volume 2,892,233Daily, split-adjusted
Vitals
Market cap$84.8B
52-week range$262.75 – $416.69
Volume (last day)2,892,233
P/E (TTM)72.3
EBIT / EV yield1.9%
Free-cash-flow yield1.7%
Dividend yieldNo dividend
Revenue (TTM)$5.5B
Net income (TTM)$1.2B
Operating margin28.3%
Return on capital22.3%
Debt incl. leasesData missing
Cash & securities$1.4B
Debt = borrowings plus lease liabilities. Cash & securities = cash, equivalents and short-term marketable securities (long-term securities are not counted, so net cash can be understated for companies that hold large long-term investments). Net debt = debt minus cash & securities. Source: latest SEC 10-Q/10-K. EBIT / EV yield = operating profit divided by market cap plus net debt.
Fair value estimate
$299middle half of models $282 – $313
Fair
−3.4% to fair value
Average of the 10 valuation models that pass our checks: multiples, discounted cash flow, dividend discount and earnings power value. A model more than 100% above or 60% below the price is left out as unrealistic. Model uncertainty is Low, based on how far apart the models are. Undervalued or Overvalued means the gap to fair value is more than 17.5%.
Price $310
Undervalued < $255Fair $255 – $363Overvalued > $363
P/E multiple
$306
P/B multiple
$354
P/S multiple
$282
EV/EBITDA multiple
$283
EV/EBIT multiple
$291
EV/revenue multiple
$288
10-year DCF, EBITDA exit
$278
5-year DCF, EBITDA exit
$317
10-year DCF, revenue exit
$277
5-year DCF, revenue exit
$316
10-year DCF, growth exit · not used
$86
5-year DCF, growth exit · not used
$79
Earnings power value · not used
$91
A model estimate, not a price target or recommendation. Inputs: risk-free 5.13%, equity risk premium 4.30% (Damodaran). How it works.
What this means
Average business, fairly priced
The price sits inside our fair-value band. A high score does not guarantee a good outcome; it shifts the odds a little. Use the checklist as a prompt for your own research.
Before you invest · decision checklist
Ticked boxes are filled in from our data; the rest are yours to answer.
The five-lens scan
Every score explained in one sentence, ranked against Information Technology peers. Open a lens to see the numbers behind it.
Strong: 70 to 100Fair: 50 to 69Weak: under 50No score: not enough data
Valuation
Weak
36/100
Expensive against its sector on earnings and cash flow.
See the numbers →
EBIT / EV yield1.9%
Free-cash-flow yield1.7%
Fair value vs price1.0×
Growth
Fair
54/100
Growing at a typical pace for its sector.
See the numbers →
Revenue growth (3y)14.1%
EPS growth (3y)9.5%
Growth consistency90%
Profitability
Fair
61/100
Returns on capital are typical for its sector.
See the numbers →
Return on invested capital22.3%
Operating margin28.3%
Financial health
Weak
47/100
Balance sheet is more stretched than most peers.
See the numbers →
Piotroski F-Score6 / 9
Interest cover13.1×
Dividends
None
–/100
Pays no dividend.
See the numbers →
Quarterly results: last 6 quarters
+26.9%
Dec '24
+23.1%
Mar '25
+20.2%
Jun '25
+10.1%
Sep '25
+6.2%
Dec '25
+18.7%
Mar '26
Revenue against the same quarter a year earlier. Latest quarter revenue $1.5B, diluted EPS $1.23.
Compare with peers
ADBE Adobe Inc.77 INTU Intuit Inc.71 FICO Fair Isaac Corp71 ADSK Autodesk, Inc.67Other Application Software companies by X-Ray Score.
SWOT analysis: Cadence Design Systems Inc
Strengthsinside the company
- Return on invested capital is 22.3%, against a median of 19.7% for industry peers.
- Revenue has grown 14.1% a year over three years (median 12.3% for industry peers).
- Operating profit covers interest 13x, so debt costs are a small drag.
Weaknessesinside the company
- No clear weakness in the figures we track.
Opportunitiesvaluation and setting
- Our Market Compass rates the backdrop for Information Technology as favourable.
Threatsvaluation and setting
- Trades at 72.4x earnings, 160% above the 27.8x median of industry peers, so the price already assumes better results.
Written by fixed rules from the figures on this page and the peer table below: filings, our fair value, the sector climate and the price trend. It summarises the data, it is not a forecast or advice.
Compare CDNS with peers and sector
Medians of 13 Application Software peers and of 74 Information Technology stocks in our universe.
Largest peers (X-Ray Score): PLTR 63, ORCL 56, CRM 52, ADBE 77, INTU 71, DDOG 50.
| Metric | CDNS | Peers | Sector |
|---|---|---|---|
| X-Ray Score (out of 100) | 49 | 58 | 50 |
| Valuation | 36 | 67 | 52 |
| Growth | 54 | 65 | 54 |
| Profitability | 61 | 62 | 49 |
| Financial health | 47 | 50 | 50 |
| Dividends | – | 72 | 50 |
Sector leaders: highest X-Ray Score in Information Technology
CDNS ranks #40 of 75 in Information Technology and #12 of 14 in Application Software by X-Ray Score. A higher score is stronger on our five pillars; it is a ranking of facts, not a forecast.
Green means better than the peer median, red worse (only where a higher or lower figure is clearly better). A dash means too few companies report the figure. P/E, EV/EBITDA and price changes are not graded: a different level is not good or bad by itself.
Factor ratings for CDNS
Each factor is rated by where CDNS stands among the 75 Information Technology stocks in our universe.
Rating against the sector
Goodthe top third of these stocks
Averagethe middle third of these stocks
Badthe bottom third of these stocks
"Beats" is the share of those stocks it is ahead of.
Against its own history
The last columns set today's figure against the company's own median of its last five financial years:
▲ Betterbetter than its usual level
▼ Worseworse than its usual level
≈ In linewithin its usual range
For valuation factors Good means cheaper than most of the sector and Better means cheaper than usual for this company, which is not the same as a bargain.
In total: 1 Good · 15 Average · 4 Bad of 20
Growth: 1 · 2 · 0
Profitability: 0 · 4 · 0
Financial strength: 0 · 3 · 0
Valuation: 0 · 1 · 4
Cash flow: 0 · 4 · 0
Efficiency: 0 · 1 · 0
| Factor | CDNS | Rating | Sector median | Own 5-year median | Against own history |
|---|---|---|---|---|---|
| Growth | |||||
| Revenue growth, 3 years a year | +14.1% | Good beats 70% | +9.7% | – | – |
| Revenue growth, last year | +14.1% | Average beats 54% | +13.7% | +14.1% | ≈ In line |
| EPS growth, 3 years a year | +9.5% | Average beats 57% | +5.9% | – | – |
| Profitability | |||||
| Operating margin | 28.3% | Average beats 65% | 20.3% | 29.1% | ≈ In line |
| Net margin | 21.2% | Average beats 62% | 17.8% | 23.3% | ≈ In line |
| Return on invested capital | 22.3% | Average beats 56% | 19.4% | – | – |
| Return on equity | 17.8% | Average beats 44% | 21.0% | 25.4% | ▼ Worse |
| Financial strength | |||||
| Interest cover | 13.1x | Average beats 37% | 23.0x | 34.6x | ▼ Worse |
| Current ratio | 1.47 | Average beats 45% | 1.57 | 1.77 | ▼ Worse |
| Piotroski F-score | 6 / 9 | Average beats 43% | 6 / 9 | – | – |
| Valuation | |||||
| P/E ratio | 72.4x | Bad beats 16% | 33.6x | 74.7x | ≈ In line |
| Price / book | 12.9x | Average beats 34% | 8.3x | 17.6x | ▲ Better |
| Price / sales | 15.3x | Bad beats 18% | 6.9x | 17.4x | ▲ Better |
| EV / EBITDA | 45.8x | Bad beats 20% | 24.7x | – | – |
| Free cash flow yield | 1.7% | Bad beats 22% | 3.4% | 1.9% | ≈ In line |
| Cash flow | |||||
| Free cash flow margin | 25.9% | Average beats 58% | 22.3% | 30.5% | ▼ Worse |
| Cash from operations / net income | 1.36 | Average beats 47% | 1.39 | 1.46 | ≈ In line |
| Free cash flow growth, 3 years a year | +12.4% | Average beats 47% | +15.4% | – | – |
| Accruals (lower is better) | −3.5% | Average beats 42% | −4.4% | – | – |
| Efficiency | |||||
| Days sales outstanding | 68 days | Average beats 42% | 63 days | 50 days | ▼ Worse |
These ratings compare companies with each other and describe the past; they are not a forecast, a recommendation or part of the X-Ray Score. A factor is left out when its data is missing or meaningless (for example a P/E on negative earnings). A dash in the history columns means fewer than three usable years.
Fundamentals checklist
● 1 Good · ● 11 Average · ● 2 BadCash quality
Earnings backed by cashAverage
Free-cash-flow yieldBad
Risk models
Altman Z''Average
Piotroski F-ScoreAverage
Growth
EPS growth (3y)Average
Free-cash-flow growth (3y)Average
Revenue growth (3y)Good
Growth consistencyAverage
Balance sheet
Current ratioAverage
Interest coverAverage
Valuation
Fair value vs priceAverage
EBIT / EV yieldBad
Profitability
Return on invested capitalAverage
Operating marginAverage
Each check is graded against the company's sector, not a fixed number. Checklist score 47/100.
Financials
| FY22 | FY22 | FY23 | FY24 | FY25 | |
|---|---|---|---|---|---|
| Revenue | $3.0B | $3.6B | $4.1B | $4.6B | $5.3B |
| Operating income | $779M | $1.1B | $1.3B | $1.4B | $1.5B |
| Net income | $696M | $849M | $1.0B | $1.1B | $1.1B |
| Operating cash flow | $1.1B | $1.2B | $1.3B | $1.3B | $1.7B |
| Operating margin | 26.1% | 30.1% | 30.6% | 29.1% | 28.2% |
| Free cash flow | $1.0B | $1.1B | $1.2B | $1.1B | $1.6B |
| Diluted EPS | $2.50 | $3.09 | $3.82 | $3.85 | $4.06 |
Fiscal years, from SEC filings.
Technical summary
Daily
Bearish
4 bullish · 1 neutral · 11 bearish
Weekly
Strongly bearish
1 bullish · 1 neutral · 10 bearish
Monthly
Bearish
2 bullish · 1 neutral · 5 bearish
Moving averages (daily)
| SMA 10 | 329.0 | Bearish |
| EMA 10 | 325.9 | Bearish |
| SMA 20 | 335.9 | Bearish |
| EMA 20 | 327.3 | Bearish |
| SMA 50 | 319.0 | Bearish |
| EMA 50 | 326.8 | Bearish |
| SMA 100 | 341.9 | Bearish |
| EMA 100 | 330.1 | Bearish |
| SMA 200 | 327.2 | Bearish |
| EMA 200 | 329.3 | Bearish |
Oscillators (daily)
| RSI (14) | 40.49 | Neutral |
| MACD (12, 26) | 0.29 | Bullish |
| Momentum (12) | -13.88 | Bearish |
| Stochastic %K (14) | 5.87 | Bullish |
| Williams %R (14) | -94.13 | Bullish |
| CCI (20) | -118.4 | Bullish |
Pivot points (classic, last session)
S3 291.1 | S2 298.8 | S1 304.2 | Pivot 311.8 | R1 317.3 | R2 324.9 | R3 330.4 |
Signals describe what the chart is doing, not what to do. Moving averages: price above the average is bullish. Oscillators use the usual thresholds (RSI 30/70, Stochastic 20/80, CCI ±100, Williams %R −80/−20; MACD and momentum above zero are bullish). Weekly and monthly views use closing prices only.
ETFs that hold CDNS
| ETF | Share of the fund |
|---|---|
| IGV iShares Expanded Tech-Software Sector | 3.91% |
| FDG American Century Focused Dynamic Growt... | 3.55% |
| GRNY Fundstrat Granny Shots US Large Cap | 2.23% |
| SMH VanEck Semiconductor | 2.15% |
| QTEC First Trust NASDAQ-100-Technology Sect... | 2.10% |
| IGPT Invesco AI and Next Gen Software | 1.69% |
| JEPI JPMorgan Equity Premium Income | 1.29% |
| RSPT Invesco S&P 500 Equal Weight Technolog... | 1.21% |
The eight funds with the largest weight in CDNS among the ETFs we cover, from each fund's latest SEC Form N-PORT (quarter-end positions, so they can be months old). All ETFs.
CDNS stock splits
CDNS has split its stock 3 times since 1995. The latest was a 2-for-1 split on 17 Nov 1997.
Full CDNS stock split history →CDNS SEC filings
10-QSEC EDGAR
Quarterly report
8-KSEC EDGAR
Results of operations
8-KSEC EDGAR
Director or officer change; Shareholder vote results
10-QSEC EDGAR
Quarterly report
8-KSEC EDGAR
Results of operations
DEF 14ASEC EDGAR
Proxy statement
8-KSEC EDGAR
Current report
10-KSEC EDGAR
Annual report
Where the numbers come from
Statements SEC EDGAR filings (10-K, 10-Q), quarters derived from year-to-date figures.
Prices end-of-day closes, split-adjusted.
Industry inputs beta, multiples and equity risk premium from Damodaran Online (NYU Stern).
StocksXray is for education only and is not financial advice. Scores and fair values are model estimates from public filings and carry uncertainty.