Latest Ratios: P/E Ratio 91.4x · EV/EBITDA 54.1x · ROE 21.9%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $102.3B | $85.4B | $82.3B | $74.3B | $44.2B | $52.0B | $38.2B | $19.5B | $12.2B | $11.7B | $7.3B |
| Enterprise Value | $101.8B | $84.9B | $82.2B | $74.0B | $44.2B | $51.3B | $37.7B | $19.2B | $12.1B | $11.8B | $7.6B |
| P/E Ratio → | 91.39 | 76.99 | 78.04 | 71.30 | 51.99 | 74.54 | 64.66 | 19.65 | 35.35 | 57.29 | 36.03 |
| P/S Ratio | 19.32 | 16.13 | 17.73 | 18.16 | 12.40 | 17.39 | 14.22 | 8.33 | 5.72 | 6.03 | 4.04 |
| P/B Ratio | 18.53 | 15.61 | 17.60 | 21.82 | 16.09 | 18.96 | 15.30 | 9.25 | 9.49 | 11.85 | 9.90 |
| P/FCF | 64.49 | 53.84 | 73.59 | 59.59 | 39.53 | 50.25 | 47.09 | 29.70 | 22.50 | 28.39 | 18.78 |
| P/OCF | 59.20 | 49.42 | 65.27 | 55.06 | 35.57 | 47.20 | 42.16 | 26.67 | 20.21 | 24.89 | 16.51 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 16.03 | 17.71 | 18.10 | 12.40 | 17.18 | 14.05 | 8.21 | 5.68 | 6.05 | 4.17 |
| EV / EBITDA | 54.06 | 45.08 | 53.19 | 53.00 | 36.54 | 56.42 | 47.36 | 31.21 | 23.57 | 26.76 | 20.78 |
| EV / EBIT | 61.72 | 51.82 | 55.86 | 56.17 | 41.36 | 65.36 | 57.66 | 38.53 | 29.80 | 35.28 | 26.39 |
| EV / FCF | — | 53.51 | 73.54 | 59.39 | 39.53 | 49.64 | 46.52 | 29.29 | 22.34 | 28.49 | 19.36 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 86.4% | 86.4% | 86.0% | 89.4% | 89.6% | 89.7% | 88.6% | 88.6% | 87.9% | 87.8% | 85.9% |
| Operating Margin | 31.1% | 31.1% | 29.1% | 30.6% | 30.1% | 26.1% | 24.1% | 21.1% | 18.5% | 16.7% | 13.5% |
| Net Profit Margin | 20.9% | 20.9% | 22.7% | 25.5% | 23.8% | 23.3% | 22.0% | 42.3% | 16.2% | 10.5% | 11.2% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 21.9% | 21.9% | 26.1% | 33.9% | 31.0% | 26.6% | 25.7% | 58.3% | 30.4% | 23.6% | 19.2% |
| ROA | 11.6% | 11.6% | 14.4% | 19.3% | 17.8% | 16.7% | 16.2% | 34.0% | 14.1% | 9.0% | 9.1% |
| ROIC | 25.9% | 25.9% | 26.1% | 31.8% | 33.2% | 28.3% | 25.1% | 24.4% | 26.6% | 24.3% | 17.7% |
| ROCE | 20.5% | 20.5% | 23.1% | 31.8% | 29.8% | 23.7% | 22.1% | 22.1% | 22.4% | 19.7% | 14.7% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.45 | 0.45 | 0.55 | 0.22 | 0.32 | 0.17 | 0.18 | 0.20 | 0.35 | 0.74 | 0.93 |
| Debt / EBITDA | 1.32 | 1.32 | 1.67 | 0.55 | 0.73 | 0.50 | 0.58 | 0.70 | 0.86 | 1.66 | 1.90 |
| Net Debt / Equity | — | -0.10 | -0.01 | -0.07 | 0.00 | -0.23 | -0.19 | -0.13 | -0.07 | 0.04 | 0.31 |
| Net Debt / EBITDA | -0.28 | -0.28 | -0.04 | -0.17 | 0.00 | -0.70 | -0.59 | -0.45 | -0.17 | 0.09 | 0.63 |
| Debt / FCF | — | -0.33 | -0.05 | -0.20 | 0.00 | -0.61 | -0.58 | -0.42 | -0.16 | 0.10 | 0.58 |
| Interest Coverage | 14.06 | 14.06 | 19.37 | 36.43 | 46.58 | 46.26 | 31.50 | 26.44 | 17.60 | 12.99 | 12.12 |
Net cash position: cash ($3.0B) exceeds total debt ($2.5B)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 2.86 | 2.86 | 2.93 | 1.24 | 1.27 | 1.77 | 1.86 | 1.74 | 1.34 | 1.53 | 1.20 |
| Quick Ratio | 2.67 | 2.67 | 2.74 | 1.13 | 1.17 | 1.65 | 1.76 | 1.66 | 1.30 | 1.47 | 1.13 |
| Cash Ratio | 1.84 | 1.84 | 2.03 | 0.72 | 0.66 | 1.12 | 1.17 | 1.05 | 0.75 | 1.08 | 0.80 |
| Asset Turnover | — | 0.52 | 0.52 | 0.72 | 0.69 | 0.68 | 0.68 | 0.70 | 0.87 | 0.80 | 0.87 |
| Inventory Turnover | 2.38 | 2.38 | 2.51 | 2.39 | 2.90 | 2.65 | 4.02 | 4.77 | 9.19 | 7.15 | 6.50 |
| Days Sales Outstanding | — | 65.12 | 53.51 | 45.23 | 49.88 | 42.07 | 47.37 | 47.58 | 50.72 | 35.77 | 31.59 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — | — | — | — | — | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 1.1% | 1.3% | 1.3% | 1.4% | 1.9% | 1.3% | 1.5% | 5.1% | 2.8% | 1.7% | 2.8% |
| FCF Yield | 1.6% | 1.9% | 1.4% | 1.7% | 2.5% | 2.0% | 2.1% | 3.4% | 4.4% | 3.5% | 5.3% |
| Buyback Yield | 0.9% | 1.1% | 1.0% | 0.9% | 2.6% | 1.4% | 1.3% | 2.0% | 2.6% | 1.3% | 13.1% |
| Total Shareholder Yield | 0.9% | 1.1% | 1.0% | 0.9% | 2.6% | 1.4% | 1.3% | 2.0% | 2.6% | 1.3% | 13.1% |
| Shares Outstanding | — | $273M | $274M | $273M | $275M | $279M | $280M | $281M | $281M | $280M | $291M |
Geopolitical export control exposure
According to current market data, CDNS trades at a forward P/E of 47.51, which appears to price in sustained double-digit growth and the company's role as a critical utility for semiconductor design, despite the inherent volatility of its high-multiple valuation relative to broader software sector peers.
The elevated P/E and EV/EBITDA multiples suggest that investors are paying a significant premium for the predictability of Cadence's recurring revenue model and its entrenched position in the chip design workflow. While these multiples are high by historical standards, they may be justified by the company's ability to maintain high margins even as it expands into new, less mature simulation markets.
Based on reported figures, Cadence's ROIC has fluctuated between 4.9% and 8.5% over the last ten quarters, a trend that suggests the company is currently prioritizing strategic acquisitions to bolster its technological ecosystem over immediate, short-term maximization of returns on invested capital.
The variability in ROIC reflects the dilutive impact of recent large-scale acquisitions on the capital base. Investors should monitor whether these investments in multi-physics and AI-driven tools eventually yield the expected margin expansion, as the current trend indicates that the company is in a phase of heavy reinvestment.
As reported in financial statements, the company's cash conversion cycle has shown significant volatility, shifting from 113 days in 2023Q4 to -176 days in 2026Q1, which highlights the substantial influence of large-scale hardware delivery timing on the company's overall working capital efficiency and liquidity management.
The negative cash conversion cycle is a positive indicator of the company's ability to collect cash from customers well before paying its own obligations, a hallmark of a powerful software-centric business model. However, the extreme quarterly swings suggest that hardware sales cycles can temporarily obscure the underlying efficiency of the core software licensing business.
Based on the latest quarterly filings, Cadence maintains a disciplined debt-to-equity ratio of 0.47, which indicates that the company's balance sheet remains well-positioned to absorb potential market shocks or fund further inorganic growth without compromising its long-term financial stability or increasing its interest coverage risk.
The company's ability to maintain a low debt-to-EBITDA ratio, currently at 5.98, provides a significant buffer against rising interest rates and economic downturns. This conservative approach to leverage appears to be a deliberate strategy to ensure the company remains agile in an industry where R&D intensity and M&A are essential for survival.
Investors frequently misapply semiconductor cyclicality metrics to Cadence, failing to recognize that as a design-phase utility, the company's revenue is driven by R&D complexity rather than chip unit volumes, which renders traditional semiconductor inventory-to-sales ratios largely irrelevant for assessing the company's true long-term growth trajectory.
By focusing on chip shipment data, analysts may incorrectly anticipate revenue declines that do not materialize because Cadence's tools are required regardless of whether a chip is eventually manufactured in high or low volumes. A more appropriate metric for assessing Cadence's health would be 'Design Starts' or 'Remaining Performance Obligations' (RPO), which better capture the long-term commitment of customers to the Cadence design flow.
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying CDNS stock.
Cadence Design Systems, Inc.'s current P/E ratio is 91.4x. The historical average is 53.0x. This places it at the 88th percentile of its historical range.
Cadence Design Systems, Inc.'s current EV/EBITDA is 54.1x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 26.3x.
Cadence Design Systems, Inc.'s return on equity (ROE) is 21.9%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 9.6%.
Based on historical data, Cadence Design Systems, Inc. is trading at a P/E of 91.4x. This is at the 88th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Cadence Design Systems, Inc. has 86.4% gross margin and 31.1% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Cadence Design Systems, Inc.'s Debt/EBITDA ratio is 1.3x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.