CDNS — Cadence Design Systems, Inc. $375.32

Generated 2026-06-30 21:48

Quality Scorecard Growth

B79/100
Pricing power (gross margin) 86% Gross margin 86% — wide margins, likely pricing power
Return on equity 21% ROE 21% — high returns on capital
Leverage (net debt / EBITDA) 0.8x Net debt / EBITDA 0.8x — low leverage
Interest coverage 14x EBIT covers interest 14x — comfortably covered
Earnings consistency (revenue) 0/3 down 0 revenue-down year(s) in 3 — no down years
🟡 Earnings growth (net income YoY) +5% Net income +5% YoY — earnings roughly flat
Cash conversion (CFO/NI) 156% Operating cash ÷ net income 156% — earnings convert to cash
Operating margin trend eroding Operating margin eroding
🟡 Revenue growth 19% Revenue +19% — moderate growth
🟡 Growth trajectory holding steady YoY +14% vs +14% prior 2-yr avg — holding steady
Dilution control -0.7%/yr Shares -0.7% YoY — dilution controlled
Rule of 40 49 growth 19% + FCF margin 30% = 49 — healthy growth + profitability

Growth-stage checklist (proxy metrics from yfinance). 12 of 12 criteria scored. Not financial advice.

Buy-Now Score

66/100
Quality ×40%79
Trajectory ×30%77
Valuation ×30%38

Comparative rank: 40% Quality + 30% Trajectory + 30% Valuation — higher = better buy now. Not financial advice.

Valuation

$90.20$427.66
Price $375.32DCF $100.22 (-73%)Analyst $388.78 (+4%)MarketGist fair $331.07 (-12%)

DCF: 14% start growth → 2.5%, 10.2% discount (band $75.70–$134.70). Analyst: 25 analysts. MarketGist fair = 80% analyst + 20% DCF. Not financial advice.

Key Trends (6-yr)

GAAP EPS
▲ +5.5% YoY
Sales
▲ +14.1% YoY
Shares Outstanding
▼ -0.2% YoY

Company Overview

Basic Information

Company Name: Cadence Design Systems, Inc.
Symbol: CDNS
Exchange: NMS
Sector: Technology
Industry: Software - Application

Company Details

Country: United States
City: San Jose
Employees: 15,110
Market Cap: $103.52B

Business Description

Cadence Design Systems, Inc. develops computational, AI-driven software, hardware, and silicon intellectual property products and solutions. The company offers functional verification services, such as Jasper, a formal verification platform; Xcelium, a parallel logic simulation platform; Verisium, a generative AI solution; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification, as well as digital IC design and sign off products, including In novus platform; and custom IC design and simulation product include Virtuoso, a platform to design and verify analog. It also provides Xcelium logic simulator and other front-end verification and virtual prototyping technologies; controllers and physical interfaces; PCI Express, universal accelerator and compute express links, and multiple memory interfaces; and Ten Silica, a digital signal processor. In addition, the company's design IP portfolio includes serializer/deserializer, peripheral component interconnect, USB, and other standard protocols; and Secure-IC, a solution for embedded security IP. Additionally, it provides System Design and Analysis (SD&A) platform, a solution that enables end-to-end system-level design and verification across chips, packages, PCBs, and electronic systems; Allegro X and Orca X platforms for PCB and advanced packaging; Sigrity X for signal and power integrity; AIR for RF design; Fidelity for computational fluid dynamics; Celsius for thermal and airflow analysis; Clarity 3D solver for electromagnetic and power electronics analysis and simulation; Integrity 3D-IC solution for 3D-IC and multi-chiplet designs; the Optimality Intelligent System Explorer, Reality digital twin, and Millennium enterprise multiphasic platforms; Allegro system design platform; and molecular modeling and simulation solutions and services. The company has a strategic collaboration with NVIDIA. The company was incorporated in 1987 and is headquartered in San Jose, California.

Key Metrics

Price & Valuation

Current Price
$375.32
Market Cap
$103.52B
P/E Ratio
87.49
Forward P/E
39.93
PEG Ratio
3.58
Price to Book
15.78

Profitability

Profit Margin: 21.18%
Operating Margin: 29.70%
Gross Margin: 86.08%
Return on Equity (ROE): 20.66%
Return on Assets (ROA): 10.39%
Revenue Growth: 18.70%

Financial Health

Current Ratio: 1.47
Quick Ratio: 1.21
Debt to Equity: 46.99
Total Debt: $3.08B
Total Cash: $1.55B
Beta: 1.15

Trading & Analyst Info

52-Week Range

52-Week High: $416.69
52-Week Low: $262.75
50-Day Average: $364.12
200-Day Average: $327.07

Analyst Recommendations

Recommendation: STRONG_BUY
Target Mean Price: $388.78
Target High: $450.00
Target Low: $275.00

Price graph

Price vs Rates, Inflation & Volume (long-term)

Dotted = market-implied expectation (next ~12 mo), not a prediction.

Quarterly Verdict

🟢 69/100

Worth buying

Quality grade B; 2 improving / 4 weakening metrics YoY.

➕ Pricing power (gross margin): Gross margin 86% — wide margins, likely pricing power
➕ Return on equity: ROE 21% — high returns on capital
➕ Leverage (net debt / EBITDA): Net debt / EBITDA 0.8x — low leverage
➕ Interest coverage: EBIT covers interest 14x — comfortably covered
➕ Earnings consistency (revenue): 0 revenue-down year(s) in 3 — no down years
➕ Cash conversion (CFO/NI): Operating cash ÷ net income 156% — earnings convert to cash
➖ Operating margin trend: Operating margin eroding
➕ Dilution control: Shares -0.7% YoY — dilution controlled
➕ Rule of 40: growth 19% + FCF margin 30% = 49 — healthy growth + profitability
➕ Revenue +18.7% YoY
➕ Net income +22.7% YoY
➖ Free cash flow -33.8% YoY
➖ Cash -49.4% YoY
➖ Debt +24.5% YoY
➖ Shares outstanding +1.0% YoY

Heuristic from the Quality Scorecard + quarter-over-quarter trends. Not financial advice.

Financial Statements

Income Statement (Annual)

Item2025-12-312024-12-312023-12-312022-12-31
Tax Effect Of Unusual Items$-30.00M$6.76M$5.44M$-2.76M
Tax Rate For Calcs$0.27$0.24$0.19$0.19
Normalized EBITDA$1.98B$1.64B$1.43B$1.22B
Total Unusual Items$-110.71M$27.69M$28.95M$-14.68M
Total Unusual Items Excluding Goodwill$-110.71M$27.69M$28.95M$-14.68M
Net Income From Continuing Operation Net Minority Interest$1.11B$1.06B$1.04B$848.95M
Reconciled Depreciation$233.84M$195.01M$145.74M$135.43M
Reconciled Cost Of Revenue$528.34M$482.86M$307.46M$254.66M
EBITDA$1.87B$1.67B$1.46B$1.20B
EBIT$1.64B$1.47B$1.32B$1.07B
Net Interest Income$-14.96M$-13.52M$-6.55M$-12.84M
Interest Expense$116.54M$76.00M$36.19M$22.93M
Interest Income$101.58M$62.48M$29.64M$10.10M
Normalized Income$1.19B$1.03B$1.02B$860.87M
Net Income From Continuing And Discontinued Operation$1.11B$1.06B$1.04B$848.95M

Showing 15 of 53 rows

Balance Sheet (Annual)

Item2025-12-312024-12-312023-12-312022-12-312021-12-31
Treasury Shares Number$59.10M$57.05M$57.45M$56.48MN/A
Ordinary Shares Number$271.80M$273.85M$271.71M$272.68MN/A
Share Issued$330.90M$330.90M$329.16M$329.16MN/A
Total Debt$2.62B$2.59B$764.41M$887.41MN/A
Tangible Book Value$2.01B$1.70B$1.53B$1.02BN/A
Invested Capital$7.95B$7.15B$4.05B$3.49BN/A
Working Capital$3.03B$2.65B$385.35M$359.07MN/A
Net Tangible Assets$2.01B$1.70B$1.53B$1.02BN/A
Capital Lease Obligations$136.29M$108.89M$115.36M$139.34MN/A
Common Stock Equity$5.47B$4.67B$3.40B$2.75BN/A
Total Capitalization$7.95B$7.15B$3.70B$3.39BN/A
Total Equity Gross Minority Interest$5.47B$4.67B$3.40B$2.75BN/A
Stockholders Equity$5.47B$4.67B$3.40B$2.75BN/A
Gains Losses Not Affecting Retained Earnings$-1.80M$-190.45M$-94.75M$-91.64MN/A
Other Equity Adjustments$-1.80M$-190.45M$-94.75M$-91.64MN/A

Showing 15 of 76 rows

Cash Flow Statement (Annual)

Item2025-12-312024-12-312023-12-312022-12-312021-12-31
Free Cash Flow$1.59B$1.12B$1.25B$1.12BN/A
Repurchase Of Capital Stock$-1.09B$-787.76M$-836.53M$-1.16BN/A
Repayment Of Debt$0.00$-1.35B$-150.00M$-485.00MN/A
Issuance Of Debt$0.00$3.20B$50.00M$885.00MN/A
Issuance Of Capital Stock$145.90M$204.24M$132.96M$105.33MN/A
Capital Expenditure$-141.87M$-142.54M$-102.50M$-124.22MN/A
Interest Paid Supplemental Data$111.95M$43.22M$34.93M$21.12MN/A
Income Tax Paid Supplemental DataN/A$509.98M$253.70M$233.24M$146.42M
End Cash Position$3.00B$2.64B$1.01B$882.33MN/A
Beginning Cash Position$2.64B$1.01B$882.33M$1.09BN/A
Effect Of Exchange Rate Changes$38.00M$-26.80M$-7.53M$-52.83MN/A
Changes In Cash$319.28M$1.66B$133.35M$-153.79MN/A
Financing Cash Flow$-948.98M$1.24B$-803.57M$-657.05MN/A
Cash Flow From Continuing Financing Activities$-948.98M$1.24B$-803.57M$-657.05MN/A
Net Other Financing ChargesN/A$-23.83MN/A$-425.00K$-1.28M

Showing 15 of 58 rows

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