CDNS Stock Analysis: Cadence Design Systems | NASDAQ
Software - Application | NASDAQ, USA | Market Cap: 89.814m USD | 12M Return: 1.2% | US1273871087 | Charts, Fundamentals & Technical Analysis
Avg Turnover: 818M
EPS Trend: 98.0%
Qual. Beats: 0
Rev. Trend: 99.0%
Qual. Beats: 0
Warnings
No concerns identified
Tailwinds
Seasonality 11.7 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
Cadence Design Systems (CDNS) provides computational software, hardware, and silicon intellectual property used to design, verify, and analyze semiconductors and electronic systems. Its offerings span functional verification (Jasper, Xcelium, Verisium, Palladium, Protium), digital and custom IC design (Innovus, Virtuoso), connectivity and security design IP (PCI Express, USB, Secure-IC), and system-level design and analysis platforms for chips, packages, and PCBs (Allegro X, Orca X, Sigrity X, Clarity 3D solver, Integrity 3D-IC). The company is integrating generative AI across its toolchain and maintains a strategic partnership with NVIDIA.
Cadence operates in the Electronic Design Automation (EDA) sector, an oligopoly dominated by three players: Cadence, Synopsys, and Siemens EDA. Its tools are mission-critical inputs for chipmakers and system OEMs, giving the business a software-like profile with high switching costs and recurring maintenance revenue. Founded in 1987 and headquartered in San Jose, California, Cadence is classified as a Large Cap stock in the Information Technology / Application Software segment.
- AI chip design demand boosts EDA software revenue
- China export controls restrict semiconductor design tool access
- System Design and Analysis segment expands with 3D-IC demand
| Net Income: 1.38b TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.14 > 0.02 and ΔFCF/TA -2.77 > 1.0 |
| NWC/Revenue: 23.52% < 20% (prev 53.56%; Δ -30.04% < -1%) |
| CFO/TA 0.15 > 3% & CFO 1.85b > Net Income 1.38b |
| Net Debt (1.21b) to EBITDA (2.18b): 0.55 < 3 |
| Current Ratio: 1.74 > 1.5 & < 3 |
| Outstanding Shares: last quarter (274.9m) vs 12m ago 0.75% < -2% |
| Gross Margin: 88.50% > 18% (prev 85.57%; Δ 2.93% > 0.5%) |
| Asset Turnover: 54.08% > 50% (prev 53.52%; Δ 0.56% > 0%) |
| Interest Coverage Ratio: 14.83 > 6 (EBIT TTM 1.86b / Interest Expense TTM 125.2m) |
| A: 0.11 (Total Current Assets 3.22b - Total Current Liabilities 1.85b) / Total Assets 12.1b |
| B: 0.65 (Retained Earnings 7.80b / Total Assets 12.1b) |
| C: 0.17 (EBIT TTM 1.86b / Avg Total Assets 10.8b) |
| D: 1.31 (Book Value of Equity 6.86b / Total Liabilities 5.22b) |
| Altman-Z'' = 5.39 = AAA |
| DSRI: 1.39 (Receivables 1.07b/670.2m, Revenue 5.84b/5.09b) |
| GMI: 0.97 (GM 85.57% / 88.50%) |
| AQI: 1.36 (AQ_t 0.69 / AQ_t-1 0.51) |
| SGI: 1.15 (Revenue 5.84b / 5.09b) |
| TATA: -0.04 (NI 1.38b - CFO 1.85b) / TA 12.1b) |
| Beneish M = -2.42 (Cap -4..+1) = BBB |
As of October 03, 2026, the stock is trading at USD 351.35 with a total of 2,093,620 shares traded. Over the past week, the price has changed by +7.73%, over one month by +14.57%, over three months by -5.84% and over the past year by +1.18%.
Current recommended Stop Loss: 336.40 (which is 4.3% or 1.2 ATR below the current price).
Cadence Design Systems has received a consensus analysts rating of 4.56. Therefore, it is recommended to buy CDNS.
- StrongBuy: 17
- Buy: 5
- Hold: 3
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 405.5 | 15.4% |
P/E Trailing = 64.9661
P/E Forward = 31.5457
P/S = 15.3854
P/B = 12.1655
P/EG = 2.3143
Revenue TTM = 5.84b USD
EBIT TTM = 1.86b USD
EBITDA TTM = 2.18b USD
Long Term Debt = 2.48b USD (from longTermDebt, last quarter)
Short Term Debt = 425.0m USD (from shortTermDebt, two quarters ago)
Debt = 2.65b USD (from shortLongTermDebtTotal, last quarter) + Leases 169.2m
Net Debt = 1.21b USD (calculated: Debt 2.65b - CCE 1.44b)
Enterprise Value = 91.0b USD (89.8b + Debt 2.65b - CCE 1.44b)
Interest Coverage Ratio = 14.83 (Ebit TTM 1.86b / Interest Expense TTM 125.2m)
EV/FCF = 54.22x (Enterprise Value 91.0b / FCF TTM 1.68b)
FCF Yield = 1.84% (FCF TTM 1.68b / Enterprise Value 91.0b)
FCF Margin = 28.76% (FCF TTM 1.68b / Revenue TTM 5.84b)
Net Margin = 23.61% (Net Income TTM 1.38b / Revenue TTM 5.84b)
Gross Margin = 88.50% ((Revenue TTM 5.84b - Cost of Revenue TTM 671.5m) / Revenue TTM)
Gross Margin QoQ = 84.90% (prev none%)
Tobins Q-Ratio = 7.53 (Enterprise Value 91.0b / Total Assets 12.1b)
Interest Expense / Debt = 4.72% (Interest Expense 125.2m / Debt 2.65b)
Taxrate = 24.46% (446.1m / 1.82b)
NOPAT = 1.40b (EBIT 1.86b * (1 - 24.46%))
Current Ratio = 1.74 (Total Current Assets 3.22b / Total Current Liabilities 1.85b)
Debt / Equity = 0.39 (Debt 2.65b / totalStockholderEquity, last quarter 6.86b)
Debt / EBITDA = 0.55 (Net Debt 1.21b / EBITDA 2.18b)
Debt / FCF = 0.72 (Net Debt 1.21b / FCF TTM 1.68b)
Total Stockholder Equity = 6.02b (last 4 quarters mean from totalStockholderEquity)
RoA = 12.77% (Net Income 1.38b / Total Assets 12.1b)
RoE = 22.88% (Net Income TTM 1.38b / Total Stockholder Equity 6.02b)
RoCE = 21.83% (EBIT 1.86b / Capital Employed (Equity 6.02b + L.T.Debt 2.48b))
RoIC = 14.11% (NOPAT 1.40b / Invested Capital 9.94b)
WACC = 10.51% (E(89.8b)/V(92.5b) * Re(10.71%) + D(2.65b)/V(92.5b) * Rd(4.72%) * (1-Tc(0.24)))
Discount Rate = 10.71% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 20.47 | Cagr: 0.23%
[DCF] Terminal Value 69.17% ; FCFF base≈1.64b ; Y1≈1.73b ; Y5≈2.02b
[DCF] Fair Price = 77.80 (EV 22.6b - Net Debt 1.21b = Equity 21.4b / Shares 275.4m; r=10.51% [WACC]; 5y FCF grow 5.91% → 2.50% )
EPS Correlation: 97.97 | EPS CAGR: 20.26% | SUE: -0.79 | # QB: 0
Revenue Correlation: 99.02 | Revenue CAGR: 15.92% | SUE: 0.84 | # QB: 0
EPS current Quarter (2026-09-30): EPS=2.05 | Chg30d=+0.03% | Revisions=+75% | Analysts=18
EPS current Year (2026-12-31): EPS=4.81 | Chg30d=+0.00% | Revisions=+77% | GrowthEPS=+18.4% | GrowthRev=+19.3%
EPS next Year (2027-12-31): EPS=9.56 | Chg30d=+0.15% | Revisions=+86% | GrowthEPS=+17.4% | GrowthRev=+13.4%
[Analyst] Revisions Ratio: +90% (up=45, down=1)