CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis
NASDAQ:CDNS • US1273871087
301.4 USD
+3.8 (+1.28%)
At close: Feb 27, 2026
300.6 USD
-0.8 (-0.27%)
After Hours: 2/27/2026, 8:00:02 PM
Taking everything into account, CDNS scores 7 out of 10 in our fundamental rating. CDNS was compared to 274 industry peers in the Software industry. CDNS gets an excellent profitability rating and is at the same time showing great financial health properties. CDNS shows excellent growth, but is valued quite expensive already. With these ratings, CDNS could be worth investigating further 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.
- 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.
1.2 Ratios
- CDNS's Return On Assets of 10.92% is amongst the best of the industry. CDNS outperforms 86.13% of its industry peers.
- Looking at the Return On Equity, with a value of 20.26%, CDNS belongs to the top of the industry, outperforming 87.59% of the companies in the same industry.
- CDNS has a better Return On Invested Capital (14.48%) than 91.97% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CDNS 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
- The Profit Margin of CDNS (20.94%) is better than 85.04% of its industry peers.
- In the last couple of years the Profit Margin of CDNS has remained more or less at the same level.
- Looking at the Operating Margin, with a value of 31.36%, CDNS belongs to the top of the industry, outperforming 93.07% of the companies in the same industry.
- CDNS's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 86.36%, CDNS belongs to the top of the industry, outperforming 92.70% of the companies in the same industry.
- CDNS's Gross Margin has been stable in the last couple of years.
| 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
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CDNS is still creating some value.
- Compared to 1 year ago, CDNS has less shares outstanding
- Compared to 5 years ago, CDNS has less shares outstanding
- Compared to 1 year ago, CDNS has an improved debt to assets ratio.
2.2 Solvency
- CDNS has an Altman-Z score of 12.79. This indicates that CDNS is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 12.79, CDNS belongs to the top of the industry, outperforming 94.53% 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's Debt to FCF ratio of 1.56 is fine compared to the rest of the industry. CDNS outperforms 70.44% of its industry peers.
- A Debt/Equity ratio of 0.45 indicates that CDNS is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.45, CDNS is doing worse than 65.33% of the companies in the same industry.
- Although CDNS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 1.56 | ||
| Altman-Z | 12.79 |
ROIC/WACC1.33
WACC10.88%
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.
- Looking at the Current ratio, with a value of 2.86, CDNS is in the better half of the industry, outperforming 74.45% 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.
- With a decent Quick ratio value of 2.67, CDNS is doing good in the industry, outperforming 73.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.86 | ||
| Quick Ratio | 2.67 |
3. Growth
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
- The Revenue has grown by 14.12% in the past year. This is quite good.
- 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
- With a Price/Earnings ratio of 42.21, CDNS can be considered very expensive at the moment.
- CDNS's Price/Earnings ratio is in line with the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 27.10, CDNS is valued quite expensively.
- A Price/Forward Earnings ratio of 36.69 indicates a quite expensive valuation of CDNS.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CDNS is on the same level as its industry peers.
- Compared to an average S&P500 Price/Forward Earnings ratio of 28.06, CDNS is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.21 | ||
| Fwd PE | 36.69 |
4.2 Price Multiples
- CDNS's Enterprise Value to EBITDA ratio is in line with the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as CDNS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 51.7 | ||
| EV/EBITDA | 42.44 |
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.
- A more expensive valuation may be justified as CDNS's earnings are expected to grow with 12.44% in the coming years.
PEG (NY)2.81
PEG (5Y)2.04
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% |
301.4
+3.8 (+1.28%)
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 Change2.99%
Ins Owners0.25%
Ins Owner Change-1.5%
Market Cap82.04B
Revenue(TTM)5.30B
Net Income(TTM)1.11B
Analysts81.88
Price Target379.71 (25.98%)
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)-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 Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.21 | ||
| Fwd PE | 36.69 | ||
| P/S | 15.49 | ||
| P/FCF | 51.7 | ||
| P/OCF | 47.46 | ||
| P/B | 14.99 | ||
| P/tB | 40.88 | ||
| EV/EBITDA | 42.44 |
EPS(TTM)7.14
EY2.37%
EPS(NY)8.21
Fwd EY2.73%
FCF(TTM)5.83
FCFY1.93%
OCF(TTM)6.35
OCFY2.11%
SpS19.46
BVpS20.11
TBVpS7.37
PEG (NY)2.81
PEG (5Y)2.04
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 | 12.79 |
F-Score7
WACC10.88%
ROIC/WACC1.33
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 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 9 / 10.
How financially healthy is CADENCE DESIGN SYS INC?
The financial health rating of CADENCE DESIGN SYS INC (CDNS) is 8 / 10.