(CDNS) Cadence Design Systems - Overview
Stock: Verification, Synthesis, Implementation, Custom, IP
EPS (Earnings per Share)
Revenue
| Risk 5d forecast | |
|---|---|
| Volatility | 37.1% |
| Relative Tail Risk | -7.81% |
| Reward TTM | |
|---|---|
| Sharpe Ratio | 0.00 |
| Alpha | -22.65 |
| Character TTM | |
|---|---|
| Beta | 1.286 |
| Beta Downside | 1.119 |
| Drawdowns 3y | |
|---|---|
| Max DD | 29.05% |
| CAGR/Max DD | 0.55 |
Description: CDNS Cadence Design Systems January 27, 2026
Cadence Design Systems (NASDAQ: CDNS) is a global provider of electronic design automation (EDA) software, hardware, and services that enable semiconductor companies to design, verify, and bring chips to market. Its portfolio spans functional verification (Jasper, Xcelium, Palladium, Protium), digital IC design and sign-off (Genus, Joules, Innovus), custom analog/mixed-signal design (Virtuoso Studio), and multi-physics system simulation, plus a suite of IP and methodology services for industries ranging from hyperscale computing to automotive and aerospace.
In its most recent fiscal year (FY 2025, ended July 31 2025), Cadence reported revenue of **$4.68 billion**, a **12.4 % year-over-year increase**, driven primarily by a 19 % rise in the Verification & Implementation segment. Gross margin expanded to **71.2 %**, while operating cash flow reached **$1.15 billion**, supporting a **$1.2 billion share repurchase** program announced in Q3 2025. R&D intensity remained high at **23 % of revenue**, underscoring continued investment in AI-assisted design tools.
The EDA market is being reshaped by three macro drivers: (1) the acceleration of AI-centric chip designs, which raises demand for high-performance verification platforms; (2) the resurgence of domestic semiconductor fabs in the U.S. and Europe, increasing the need for advanced design-for-manufacturability solutions; and (3) the rollout of 5G and early-stage 6G infrastructure, expanding the automotive and hyperscale computing addressable base. Cadence’s recent launch of **Cadence AI-Assist**, a machine-learning-powered synthesis engine, positions it to capture a growing share of the AI-chip design spend, which analysts estimate will grow at **c. 15 % CAGR** through 2030.
For a deeper, data-driven view of Cadence’s valuation dynamics, you may find the free analytical tools on ValueRay useful for extending this initial assessment.
Piotroski VR‑10 (Strict, 0-10) 8.0
| Net Income: 1.06b TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.15 > 0.02 and ΔFCF/TA 5.02 > 1.0 |
| NWC/Revenue: 55.26% < 20% (prev 55.70%; Δ -0.44% < -1%) |
| CFO/TA 0.17 > 3% & CFO 1.62b > Net Income 1.06b |
| Net Debt (-274.1m) to EBITDA (1.80b): -0.15 < 3 |
| Current Ratio: 3.05 > 1.5 & < 3 |
| Outstanding Shares: last quarter (273.8m) vs 12m ago -0.06% < -2% |
| Gross Margin: 87.82% > 18% (prev 0.88%; Δ 8694 % > 0.5%) |
| Asset Turnover: 55.55% > 50% (prev 47.50%; Δ 8.06% > 0%) |
| Interest Coverage Ratio: 13.53 > 6 (EBITDA TTM 1.80b / Interest Expense TTM 117.0m) |
Altman Z'' 8.08
| A: 0.30 (Total Current Assets 4.29b - Total Current Liabilities 1.41b) / Total Assets 9.60b |
| B: 0.70 (Retained Earnings 6.71b / Total Assets 9.60b) |
| C: 0.17 (EBIT TTM 1.58b / Avg Total Assets 9.38b) |
| D: 2.57 (Book Value of Equity 11.33b / Total Liabilities 4.40b) |
| Altman-Z'' Score: 8.08 = AAA |
Beneish M -2.84
| DSRI: 1.12 (Receivables 755.3m/561.0m, Revenue 5.21b/4.35b) |
| GMI: 1.00 (GM 87.82% / 87.79%) |
| AQI: 1.00 (AQ_t 0.50 / AQ_t-1 0.50) |
| SGI: 1.20 (Revenue 5.21b / 4.35b) |
| TATA: -0.06 (NI 1.06b - CFO 1.62b) / TA 9.60b) |
| Beneish M-Score: -2.84 (Cap -4..+1) = A |
What is the price of CDNS shares?
Over the past week, the price has changed by -10.20%, over one month by -6.83%, over three months by -13.78% and over the past year by -3.05%.
Is CDNS a buy, sell or hold?
- StrongBuy: 14
- Buy: 5
- Hold: 3
- Sell: 0
- StrongSell: 1
What are the forecasts/targets for the CDNS price?
| Issuer | Target | Up/Down from current |
|---|---|---|
| Wallstreet Target Price | 381.3 | 31.9% |
| Analysts Target Price | 381.3 | 31.9% |
| ValueRay Target Price | 322.5 | 11.5% |
CDNS Fundamental Data Overview January 29, 2026
P/E Forward = 40.6504
P/S = 16.6428
P/B = 16.8598
P/EG = 3.2247
Revenue TTM = 5.21b USD
EBIT TTM = 1.58b USD
EBITDA TTM = 1.80b USD
Long Term Debt = 2.48b USD (from longTermDebt, last quarter)
Short Term Debt = unknown (none)
Debt = 2.48b USD (from shortLongTermDebtTotal, last quarter)
Net Debt = -274.1m USD (from netDebt column, last quarter)
Enterprise Value = 86.48b USD (86.75b + Debt 2.48b - CCE 2.75b)
Interest Coverage Ratio = 13.53 (Ebit TTM 1.58b / Interest Expense TTM 117.0m)
EV/FCF = 58.49x (Enterprise Value 86.48b / FCF TTM 1.48b)
FCF Yield = 1.71% (FCF TTM 1.48b / Enterprise Value 86.48b)
FCF Margin = 28.37% (FCF TTM 1.48b / Revenue TTM 5.21b)
Net Margin = 20.35% (Net Income TTM 1.06b / Revenue TTM 5.21b)
Gross Margin = 87.82% ((Revenue TTM 5.21b - Cost of Revenue TTM 634.8m) / Revenue TTM)
Gross Margin QoQ = 95.26% (prev 85.56%)
Tobins Q-Ratio = 9.01 (Enterprise Value 86.48b / Total Assets 9.60b)
Interest Expense / Debt = 1.17% (Interest Expense 29.0m / Debt 2.48b)
Taxrate = 26.90% (105.7m / 392.8m)
NOPAT = 1.16b (EBIT 1.58b * (1 - 26.90%))
Current Ratio = 3.05 (Total Current Assets 4.29b / Total Current Liabilities 1.41b)
Debt / Equity = 0.48 (Debt 2.48b / totalStockholderEquity, last quarter 5.20b)
Debt / EBITDA = -0.15 (Net Debt -274.1m / EBITDA 1.80b)
Debt / FCF = -0.19 (Net Debt -274.1m / FCF TTM 1.48b)
Total Stockholder Equity = 4.91b (last 4 quarters mean from totalStockholderEquity)
RoA = 11.31% (Net Income 1.06b / Total Assets 9.60b)
RoE = 21.59% (Net Income TTM 1.06b / Total Stockholder Equity 4.91b)
RoCE = 21.41% (EBIT 1.58b / Capital Employed (Equity 4.91b + L.T.Debt 2.48b))
RoIC = 15.65% (NOPAT 1.16b / Invested Capital 7.39b)
WACC = 10.38% (E(86.75b)/V(89.23b) * Re(10.65%) + D(2.48b)/V(89.23b) * Rd(1.17%) * (1-Tc(0.27)))
Discount Rate = 10.65% (= CAPM, Blume Beta Adj.)
Shares Correlation 3-Years: 33.33 | Cagr: 0.25%
[DCF Debug] Terminal Value 71.37% ; FCFF base≈1.27b ; Y1≈1.38b ; Y5≈1.72b
Fair Price DCF = 75.41 (EV 20.25b - Net Debt -274.1m = Equity 20.53b / Shares 272.2m; r=10.38% [WACC]; 5y FCF grow 9.81% → 2.90% )
EPS Correlation: 4.01 | EPS CAGR: -46.19% | SUE: -4.0 | # QB: 0
Revenue Correlation: 95.41 | Revenue CAGR: 15.77% | SUE: 1.34 | # QB: 2
EPS next Quarter (2026-03-31): EPS=1.81 | Chg30d=+0.000 | Revisions Net=+8 | Analysts=17
EPS next Year (2026-12-31): EPS=5.31 | Chg30d=+0.000 | Revisions Net=+0 | Growth EPS=+35.7% | Growth Revenue=+12.5%