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CADENCE DESIGN SYS INC (CDNS) Stock Fundamental Analysis

NASDAQ:CDNS - US1273871087 - Common Stock

338.53 USD
-23.24 (-6.42%)
Last: 9/10/2025, 8:00:01 PM
339.3 USD
+0.77 (+0.23%)
After Hours: 9/10/2025, 8:00:01 PM
Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to CDNS. CDNS was compared to 280 industry peers in the Software industry. While CDNS has a great profitability rating, there are some minor concerns on its financial health. CDNS shows excellent growth, but is valued quite expensive already. These ratings would make CDNS suitable for growth investing!


Dividend Valuation Growth Profitability Health

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9

1. Profitability

1.1 Basic Checks

In the past year CDNS was profitable.
In the past year CDNS had a positive cash flow from operations.
CDNS had positive earnings in each of the past 5 years.
In the past 5 years CDNS always reported a positive cash flow from operatings.
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 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B

1.2 Ratios

CDNS's Return On Assets of 10.64% is amongst the best of the industry. CDNS outperforms 87.14% of its industry peers.
CDNS has a better Return On Equity (20.21%) than 86.07% of its industry peers.
CDNS has a Return On Invested Capital of 15.31%. This is amongst the best in the industry. CDNS outperforms 92.14% of its industry peers.
CDNS had an Average Return On Invested Capital over the past 3 years of 20.16%. This is significantly above the industry average of 11.95%.
The last Return On Invested Capital (15.31%) for CDNS is well below the 3 year average (20.16%), which needs to be investigated, but indicates that CDNS had better years and this may not be a problem.
Industry RankSector Rank
ROA 10.64%
ROE 20.21%
ROIC 15.31%
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
CDNS Yearly ROA, ROE, ROICCDNS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

1.3 Margins

With an excellent Profit Margin value of 19.88%, CDNS belongs to the best of the industry, outperforming 84.64% of the companies in the same industry.
In the last couple of years the Profit Margin of CDNS has declined.
The Operating Margin of CDNS (30.74%) is better than 92.86% of its industry peers.
In the last couple of years the Operating Margin of CDNS has grown nicely.
With an excellent Gross Margin value of 85.57%, CDNS belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
CDNS's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 30.74%
PM (TTM) 19.88%
GM 85.57%
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
CDNS Yearly Profit, Operating, Gross MarginsCDNS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

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6

2. Health

2.1 Basic Checks

CDNS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, CDNS has more shares outstanding
CDNS has less shares outstanding than it did 5 years ago.
CDNS has a worse debt/assets ratio than last year.
CDNS Yearly Shares OutstandingCDNS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M
CDNS Yearly Total Debt VS Total AssetsCDNS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

2.2 Solvency

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.
CDNS's Debt to FCF ratio of 1.56 is fine compared to the rest of the industry. CDNS outperforms 69.64% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that CDNS is not too dependend on debt financing.
The Debt to Equity ratio of CDNS (0.49) is worse than 66.07% 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 0.49
Debt/FCF 1.56
Altman-Z N/A
ROIC/WACC1.37
WACC11.16%
CDNS Yearly LT Debt VS Equity VS FCFCDNS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B

2.3 Liquidity

A Current Ratio of 2.82 indicates that CDNS has no problem at all paying its short term obligations.
CDNS has a better Current ratio (2.82) than 76.43% of its industry peers.
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 74.64% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.82
Quick Ratio 2.67
CDNS Yearly Current Assets VS Current LiabilitesCDNS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B

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8

3. Growth

3.1 Past

CDNS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.42%, which is quite impressive.
The Earnings Per Share has been growing by 22.21% on average over the past years. This is a very strong growth
The Revenue has grown by 22.29% in the past year. This is a very strong growth!
The Revenue has been growing by 14.72% on average over the past years. This is quite good.
EPS 1Y (TTM)32.42%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%28.91%
Revenue 1Y (TTM)22.29%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%20.25%

3.2 Future

The Earnings Per Share is expected to grow by 12.88% 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 11.65% yearly.
EPS Next Y18.27%
EPS Next 2Y16.4%
EPS Next 3Y15.95%
EPS Next 5Y12.88%
Revenue Next Year13.22%
Revenue Next 2Y12.67%
Revenue Next 3Y12.61%
Revenue Next 5Y11.65%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
CDNS Yearly Revenue VS EstimatesCDNS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2B 4B 6B 8B 10B
CDNS Yearly EPS VS EstimatesCDNS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5 10 15

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3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 50.23, the valuation of CDNS can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of CDNS is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.03, CDNS is valued quite expensively.
Based on the Price/Forward Earnings ratio of 41.85, the valuation of CDNS can be described as expensive.
CDNS's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.54. CDNS is valued rather expensively when compared to this.
Industry RankSector Rank
PE 50.23
Fwd PE 41.85
CDNS Price Earnings VS Forward Price EarningsCDNS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

CDNS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CDNS is cheaper than 62.50% 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 58.2
EV/EBITDA 51.6
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 15.95% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.75
PEG (5Y)2.26
EPS Next 2Y16.4%
EPS Next 3Y15.95%

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0

5. Dividend

5.1 Amount

CDNS does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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CADENCE DESIGN SYS INC

NASDAQ:CDNS (9/10/2025, 8:00:01 PM)

After market: 339.3 +0.77 (+0.23%)

338.53

-23.24 (-6.42%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)07-28 2025-07-28/amc
Earnings (Next)10-27 2025-10-27/amc
Inst Owners91.41%
Inst Owner Change-3.17%
Ins Owners0.27%
Ins Owner Change8.85%
Market Cap92.25B
Analysts78.62
Price Target374.76 (10.7%)
Short Float %1.51%
Short Ratio2.37
Dividend
Industry RankSector Rank
Dividend Yield N/A
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)3.64%
Min EPS beat(2)3.21%
Max EPS beat(2)4.06%
EPS beat(4)4
Avg EPS beat(4)5.03%
Min EPS beat(4)1.28%
Max EPS beat(4)11.57%
EPS beat(8)8
Avg EPS beat(8)3.59%
EPS beat(12)12
Avg EPS beat(12)3.36%
EPS beat(16)16
Avg EPS beat(16)4.59%
Revenue beat(2)1
Avg Revenue beat(2)-0.84%
Min Revenue beat(2)-1.71%
Max Revenue beat(2)0.03%
Revenue beat(4)2
Avg Revenue beat(4)-0.51%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.87%
Revenue beat(8)3
Avg Revenue beat(8)-0.58%
Revenue beat(12)4
Avg Revenue beat(12)-0.49%
Revenue beat(16)7
Avg Revenue beat(16)-0.18%
PT rev (1m)1.02%
PT rev (3m)14%
EPS NQ rev (1m)0.55%
EPS NQ rev (3m)2.7%
EPS NY rev (1m)1.95%
EPS NY rev (3m)1.86%
Revenue NQ rev (1m)-0.15%
Revenue NQ rev (3m)0.6%
Revenue NY rev (1m)0.98%
Revenue NY rev (3m)1.19%
Valuation
Industry RankSector Rank
PE 50.23
Fwd PE 41.85
P/S 18.13
P/FCF 58.2
P/OCF 53.76
P/B 18.43
P/tB 51.6
EV/EBITDA 51.6
EPS(TTM)6.74
EY1.99%
EPS(NY)8.09
Fwd EY2.39%
FCF(TTM)5.82
FCFY1.72%
OCF(TTM)6.3
OCFY1.86%
SpS18.68
BVpS18.37
TBVpS6.56
PEG (NY)2.75
PEG (5Y)2.26
Profitability
Industry RankSector Rank
ROA 10.64%
ROE 20.21%
ROCE 19.53%
ROIC 15.31%
ROICexc 23.64%
ROICexgc 62.26%
OM 30.74%
PM (TTM) 19.88%
GM 85.57%
FCFM 31.15%
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
ROICexc(3y)28.2%
ROICexc(5y)26.78%
ROICexgc(3y)72.83%
ROICexgc(5y)62.51%
ROCE(3y)25.95%
ROCE(5y)24.28%
ROICexcg growth 3Y4.04%
ROICexcg growth 5Y11.48%
ROICexc growth 3Y-4.84%
ROICexc growth 5Y2.66%
OM growth 3Y4.75%
OM growth 5Y6.92%
PM growth 3Y-0.79%
PM growth 5Y-11.69%
GM growth 3Y-1.39%
GM growth 5Y-0.58%
F-Score5
Asset Turnover0.54
Health
Industry RankSector Rank
Debt/Equity 0.49
Debt/FCF 1.56
Debt/EBITDA 1.39
Cap/Depr 60.51%
Cap/Sales 2.57%
Interest Coverage 250
Cash Conversion 96.36%
Profit Quality 156.64%
Current Ratio 2.82
Quick Ratio 2.67
Altman-Z N/A
F-Score5
WACC11.16%
ROIC/WACC1.37
Cap/Depr(3y)78.99%
Cap/Depr(5y)69.81%
Cap/Sales(3y)3.02%
Cap/Sales(5y)2.97%
Profit Quality(3y)119.11%
Profit Quality(5y)128.61%
High Growth Momentum
Growth
EPS 1Y (TTM)32.42%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%28.91%
EPS Next Y18.27%
EPS Next 2Y16.4%
EPS Next 3Y15.95%
EPS Next 5Y12.88%
Revenue 1Y (TTM)22.29%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%20.25%
Revenue Next Year13.22%
Revenue Next 2Y12.67%
Revenue Next 3Y12.61%
Revenue Next 5Y11.65%
EBIT growth 1Y30.05%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year25.06%
EBIT Next 3Y17.9%
EBIT Next 5Y13.76%
FCF growth 1Y39.78%
FCF growth 3Y2.64%
FCF growth 5Y11.29%
OCF growth 1Y35.98%
OCF growth 3Y4.62%
OCF growth 5Y11.56%