GuruFocus·1 day ago
CDNS DCF Analysis: Intrinsic Value $235 vs Price $376On July 07, 2026, we present a DCF analysis for Cadence Design Systems Inc (CDNS), a company that has shown a price performance of +20.2% year-to-date and +15.0
Cadence Design Systems, Inc.(CDNS)Earnings, Financials & Key Ratios
CDNS•NASDAQ
$371.06
91.4× P/E·Price updated Jul 7, 2026
AboutCadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides digital IC design and sign off products, including Genus logic synthesis and Joules RTL power solutions, as well as Modus software solution to reduce systems-on-chip design-for-test time; physical implementation tools, such as place and route, optimization, and multiple patterning preparation; and signoff products to signoff the design as ready for silicon manufacturing. In addition, it offers custom IC design and simulation products to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory, and radio frequency designs; and system design and analysis products to develop printed circuit boards and IC packages, as well as to analyze electromagnetic, electro-thermal, and other multi-physics effects. Further, the company provides intellectual property (IP) products comprising pre-verified and customizable functional blocks to integrate into customer's ICs; and verification IP and memory models to emulate and model the expected behavior and interaction of standard industry system interface protocols. Additionally, it offers services related to methodology, education, and hosted design solutions, as well as technical support and maintenance services. The company serves 5G communications, aerospace and defense, automotive, industrial and healthcare, mobile, consumer, and hyperscale computing markets. Cadence Design Systems, Inc. was incorporated in 1987 and is headquartered in San Jose, California.Show more
- Revenue$5.3B+14.1%
- EBITDA$1.88B+21.9%
- Net Income$1.11B+5.1%
- EPS (Diluted)4.06+5.5%
- Gross Margin86.36%+0.4%
- EBITDA Margin35.56%+6.8%
- Operating Margin31.15%+7.0%
- Net Margin20.94%-7.9%
- ROE21.85%-16.4%
CDNS Price & Volume
Cadence Design Systems, Inc. (CDNS) stock price & volume — 10-year historical chart
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Design Complexity Drives Sustained Revenue Growth Trajectory
Investment Thesis • Updated 2026Q1
VerdictNeutral
Growth:Expanding
Profitability:Strong
Financial:Healthy
Cash Flow:Robust
Primary Risk:Geopolitical export control exposure
Key Thesis Takeaways
- Cadence Design Systems maintains a dominant competitive position by leveraging its essential EDA software suite to address increasing semiconductor design complexity, evidenced by 18.7% year-over-year revenue growth in 2026Q1.
- While the company demonstrates robust profitability with a 95.8% gross margin, investors should monitor the risks associated with $4.9 billion in goodwill and potential geopolitical export controls on advanced technology.
- Future performance appears contingent on the successful integration of recent $2.1 billion in acquisitions and the ability to manage stock-based compensation, which reached $138.2 million in the most recent quarter.
Verdict Logic
while the company shows strong 18.7% revenue growth, the current 92.92 P/E ratio and significant $4.9 billion goodwill balance suggest that much of the future upside may already be priced into the stock.
CDNS Growth Metrics
Cadence Design Systems, Inc. (CDNS) revenue, earnings & EPS growth — 3, 5 & 10-year CAGR
Revenue CAGR
10 Years12.02%
5 Years14.57%
3 Years14.14%
TTM13.42%
Profit CAGR
10 Years15.95%
5 Years13.43%
3 Years9.31%
TTM8.28%
EPS CAGR
10 Years17.49%
5 Years13.99%
3 Years9.53%
TTM8.61%
Return on Capital
10 Years23%
5 Years25.78%
3 Years25.13%
Last Year20.47%
CDNS Recent Earnings
Cadence Design Systems, Inc. (CDNS) EPS & revenue vs analyst estimates — last 4 quarters
●Beat EPS 12/12 qtrs (100%)●Beat Revenue 12/12 qtrs (100%)
Q2 2026Latest
Apr 27, 2026Metric
Actual
Est
EPS
$1.96+2.6%
$1.91
Rev
$1.5B+1.2%
$1.5B
Q1 2026
Feb 17, 2026Metric
Actual
Est
EPS
$1.99+4.2%
$1.91
Rev
$1.4B+1.1%
$1.4B
Q4 2025
Oct 27, 2025Metric
Actual
Est
EPS
$1.93+7.8%
$1.79
Rev
$1.3B+1.2%
$1.3B
Q3 2025
Jul 28, 2025Metric
Actual
Est
EPS
$1.65+5.8%
$1.56
Rev
$1.3B+2.0%
$1.2B
| Quarter | Date | EPS (Act vs Est) | Revenue (Act vs Est) |
|---|---|---|---|
| Q2 2026Latest | Apr 27, 2026 | $1.96vs $1.91+2.6% | $1.5Bvs $1.5B+1.2% |
| Q1 2026 | Feb 17, 2026 | $1.99vs $1.91+4.2% | $1.4Bvs $1.4B+1.1% |
| Q4 2025 | Oct 27, 2025 | $1.93vs $1.79+7.8% | $1.3Bvs $1.3B+1.2% |
| Q3 2025 | Jul 28, 2025 | $1.65vs $1.56+5.8% | $1.3Bvs $1.2B+2.0% |
Based on last 12 quarters of dataView full earnings history →
Latest CDNS News
Recent stock market news and headlines for Cadence Design Systems, Inc. (CDNS)
Business Wire·1 day ago
Cadence Announces Second Quarter 2026 Financial Results WebcastSAN JOSE, Calif.--(BUSINESS WIRE)---- $CDNS--Cadence (Nasdaq: CDNS) will hold its second quarter 2026 financial results webcast on Monday, July 27, 2026.
Market Watch·1 day ago
Software stocks have rarely seen such divergent performances. Here's how to pick winners.An Evercore analyst notes that infrastructure software stocks have vastly outperformed application names. But there's still hope for companies like Salesforce.
24/7 Wall Street·4 days ago
How Cadence Design Systems Powers the Chips Behind AIEvery AI accelerator that lands in a hyperscaler data center starts as software running on tools from a small club of vendors.
Zacks Investment Research·5 days ago
PRGS vs. CDNS: Which Stock Is the Better Value Option?Investors interested in stocks from the Computer - Software sector have probably already heard of Progress Software (PRGS) and Cadence Design Systems (CDNS). But which of these two stocks offers value investors a better bang for their buck right now?
Peers Comparison
Key metrics vs top competitors for Cadence Design Systems, Inc. (CDNS)
| Company | Price | Market Cap | P/E Ratio | Rev Growth (1Y) | Net Margin | ROE | Div Yield |
|---|---|---|---|---|---|---|---|
| $371.06 | $102.34B | 91.39 | 14.12% | 20.94% | 21.85% | — | |
| $436.63 | $83.61B | 54.31 | 15.12% | 8.91% | 2.64% | — | |
| $304.82 | $23.26B | -417.56 | 32.58% | 16.46% | 13.19% | — | |
| $32.21 | $5.44B | 15.12 | 16.61% | 20.04% | 50.21% | — | |
| $125.04 | $14.88B | 20.57 | 19.18% | 41.58% | 33.14% | — | |
| $196.93 | $4.77T | 40.19 | 65.47% | 62.97% | 111.66% | — |
Compare CDNS vs Peers
Cadence Design Systems, Inc. (CDNS) vs competitors — business, growth, and fundamentals comparison against the closest industry rivals.
CDNS SEC Filings & Documents
Cadence Design Systems, Inc. (CDNS) SEC filings — annual & quarterly reports (10-K, 10-Q)
8-K Announcements
6Material company update
May 12, 2026·SEC
Material company update
Apr 27, 2026·SEC
Material company update
Feb 23, 2026·SEC
10-K Annual Reports
210-Q Quarterly Reports
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CDNS Frequently Asked Questions
Cadence Design Systems, Inc. (CDNS) stock FAQ — growth, dividends, profitability & financials explained
Growth & Financials
What is Cadence Design Systems, Inc.'s revenue?
Cadence Design Systems, Inc. (CDNS) reported $5.53B in revenue for fiscal year 2025. This represents a 646% increase from $741.5M in 1996.
How fast is Cadence Design Systems, Inc. growing?
Cadence Design Systems, Inc. (CDNS) grew revenue by 14.1% over the past year. This is steady growth.
Is CDNS profitable?
Yes, Cadence Design Systems, Inc. (CDNS) is profitable, generating $1.17B in net income for fiscal year 2025 (20.9% net margin).
Dividend & Returns
What is CDNS's return on equity?
Cadence Design Systems, Inc. (CDNS) has a return on equity (ROE) of 21.9%. This is excellent, indicating efficient use of shareholder capital.
What is Cadence Design Systems, Inc.'s free cash flow?
Cadence Design Systems, Inc. (CDNS) generated $1.43B in free cash flow for fiscal year 2025. Positive FCF indicates the company can fund dividends, buybacks, or reinvestment.