CADENCE DESIGN SYS INC (CDS.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:CDS - US1273871087 - Common Stock
272.5 EUR
-3.5 (-1.27%)
Overall CDS gets a fundamental rating of 6 out of 10. We evaluated CDS against 125 industry peers in the Software industry. CDS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CDS is valued quite expensively, but it does show have an excellent growth rating. These ratings would make CDS suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
- CDS had positive earnings in the past year.
- In the past year CDS had a positive cash flow from operations.
- In the past 5 years CDS has always been profitable.
- CDS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a decent Return On Assets value of 11.05%, CDS is doing good in the industry, outperforming 80.00% of the companies in the same industry.
- CDS has a Return On Equity of 20.41%. This is in the better half of the industry: CDS outperforms 80.00% of its industry peers.
- CDS has a Return On Invested Capital of 15.75%. This is amongst the best in the industry. CDS outperforms 87.20% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CDS is significantly above the industry average of 12.89%.
- The 3 year average ROIC (20.16%) for CDS is well above the current ROIC(15.75%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROIC | 15.75% |
ROA(3y)15.55%
ROA(5y)15.49%
ROE(3y)28.03%
ROE(5y)26.64%
ROIC(3y)20.16%
ROIC(5y)18.92%
1.3 Margins
- CDS has a Profit Margin of 20.35%. This is in the better half of the industry: CDS outperforms 77.60% of its industry peers.
- CDS's Profit Margin has declined in the last couple of years.
- CDS has a better Operating Margin (31.57%) than 90.40% of its industry peers.
- CDS's Operating Margin has improved in the last couple of years.
- The Gross Margin of CDS (85.55%) is better than 82.40% of its industry peers.
- CDS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% |
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%
2. Health
2.1 Basic Checks
- CDS has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- The number of shares outstanding for CDS has been increased compared to 1 year ago.
- The number of shares outstanding for CDS has been reduced compared to 5 years ago.
- CDS has a worse debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of CDS is 1.68, which is an excellent value as it means it would take CDS, only 1.68 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1.68, CDS is in the better half of the industry, outperforming 63.20% of the companies in the same industry.
- A Debt/Equity ratio of 0.48 indicates that CDS is not too dependend on debt financing.
- The Debt to Equity ratio of CDS (0.48) is worse than 63.20% of its industry peers.
- Although CDS 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 | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Altman-Z | N/A |
ROIC/WACC1.44
WACC10.93%
2.3 Liquidity
- CDS has a Current Ratio of 3.05. This indicates that CDS is financially healthy and has no problem in meeting its short term obligations.
- CDS's Current ratio of 3.05 is amongst the best of the industry. CDS outperforms 85.60% of its industry peers.
- A Quick Ratio of 2.84 indicates that CDS has no problem at all paying its short term obligations.
- The Quick ratio of CDS (2.84) is better than 84.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 |
3. Growth
3.1 Past
- CDS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 28.52%, 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 19.72% in the past year. This is quite good.
- CDS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.72% yearly.
EPS 1Y (TTM)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
3.2 Future
- CDS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.14% yearly.
- Based on estimates for the next years, CDS will show a quite strong growth in Revenue. The Revenue will grow by 11.93% on average per year.
EPS Next Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
EPS Next 5Y13.14%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
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
- Based on the Price/Earnings ratio of 45.04, the valuation of CDS can be described as expensive.
- The rest of the industry has a similar Price/Earnings ratio as CDS.
- CDS is valuated expensively when we compare the Price/Earnings ratio to 27.47, which is the current average of the S&P500 Index.
- CDS is valuated quite expensively with a Price/Forward Earnings ratio of 38.60.
- CDS's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. CDS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.04 | ||
| Fwd PE | 38.6 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CDS is on the same level as its industry peers.
- CDS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 58.31 | ||
| EV/EBITDA | 46.07 |
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 CDS may justify a higher PE ratio.
- CDS's earnings are expected to grow with 16.29% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.2
PEG (5Y)2.03
EPS Next 2Y17.24%
EPS Next 3Y16.29%
5. Dividend
5.1 Amount
- CDS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
FRA:CDS (1/16/2026, 7:00:00 PM)
272.5
-3.5 (-1.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)10-27 2025-10-27/amc
Earnings (Next)02-17 2026-02-17/amc
Inst Owners91.74%
Inst Owner ChangeN/A
Ins Owners0.25%
Ins Owner ChangeN/A
Market Cap74.17B
Revenue(TTM)5.21B
Net Income(TTM)1.06B
Analysts81.88
Price Target334.7 (22.83%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.96%
Min EPS beat(2)4.06%
Max EPS beat(2)5.86%
EPS beat(4)4
Avg EPS beat(4)3.6%
Min EPS beat(4)1.28%
Max EPS beat(4)5.86%
EPS beat(8)8
Avg EPS beat(8)3.98%
EPS beat(12)12
Avg EPS beat(12)3.22%
EPS beat(16)16
Avg EPS beat(16)4.67%
Revenue beat(2)1
Avg Revenue beat(2)-0.36%
Min Revenue beat(2)-0.75%
Max Revenue beat(2)0.03%
Revenue beat(4)1
Avg Revenue beat(4)-0.92%
Min Revenue beat(4)-1.71%
Max Revenue beat(4)0.03%
Revenue beat(8)2
Avg Revenue beat(8)-0.69%
Revenue beat(12)3
Avg Revenue beat(12)-0.68%
Revenue beat(16)7
Avg Revenue beat(16)-0.18%
PT rev (1m)0%
PT rev (3m)N/A
EPS NQ rev (1m)0%
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)N/A
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)N/A
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.04 | ||
| Fwd PE | 38.6 | ||
| P/S | 16.54 | ||
| P/FCF | 58.31 | ||
| P/OCF | 53.33 | ||
| P/B | 16.58 | ||
| P/tB | 45.82 | ||
| EV/EBITDA | 46.07 |
EPS(TTM)6.05
EY2.22%
EPS(NY)7.06
Fwd EY2.59%
FCF(TTM)4.67
FCFY1.71%
OCF(TTM)5.11
OCFY1.88%
SpS16.47
BVpS16.43
TBVpS5.95
PEG (NY)2.2
PEG (5Y)2.03
Graham Number47.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.05% | ||
| ROE | 20.41% | ||
| ROCE | 20.09% | ||
| ROIC | 15.75% | ||
| ROICexc | 23.73% | ||
| ROICexgc | 60.82% | ||
| OM | 31.57% | ||
| PM (TTM) | 20.35% | ||
| GM | 85.55% | ||
| FCFM | 28.37% |
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%
ROICexgc growth 3Y4.04%
ROICexgc 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-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | 1.68 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 63.33% | ||
| Cap/Sales | 2.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.74% | ||
| Profit Quality | 139.37% | ||
| Current Ratio | 3.05 | ||
| Quick Ratio | 2.84 | ||
| Altman-Z | N/A |
F-Score7
WACC10.93%
ROIC/WACC1.44
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)28.52%
EPS 3Y21.73%
EPS 5Y22.21%
EPS Q2Q%17.68%
EPS Next Y20.43%
EPS Next 2Y17.24%
EPS Next 3Y16.29%
EPS Next 5Y13.14%
Revenue 1Y (TTM)19.72%
Revenue growth 3Y15.81%
Revenue growth 5Y14.72%
Sales Q2Q%10.15%
Revenue Next Year13.96%
Revenue Next 2Y13.23%
Revenue Next 3Y12.93%
Revenue Next 5Y11.93%
EBIT growth 1Y29.6%
EBIT growth 3Y21.31%
EBIT growth 5Y22.65%
EBIT Next Year23.27%
EBIT Next 3Y17.85%
EBIT Next 5Y16.55%
FCF growth 1Y19.71%
FCF growth 3Y2.64%
FCF growth 5Y11.29%
OCF growth 1Y20.58%
OCF growth 3Y4.62%
OCF growth 5Y11.56%
CADENCE DESIGN SYS INC / CDS.DE FAQ
Can you provide the ChartMill fundamental rating for CADENCE DESIGN SYS INC?
ChartMill assigns a fundamental rating of 6 / 10 to CDS.DE.
What is the valuation status for CDS stock?
ChartMill assigns a valuation rating of 2 / 10 to CADENCE DESIGN SYS INC (CDS.DE). This can be considered as Overvalued.
What is the profitability of CDS stock?
CADENCE DESIGN SYS INC (CDS.DE) has a profitability rating of 8 / 10.
How financially healthy is CADENCE DESIGN SYS INC?
The financial health rating of CADENCE DESIGN SYS INC (CDS.DE) is 7 / 10.