Cadence Design Systems, Inc.
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…
What to know about CDNS
Cadence Design Systems, Inc. is a large Technology company with a mixed financial profile. It scores well on size and profitability, but valuation is worth keeping an eye on.
Should you consider CDNS?
Based on 31 financial metrics and sector comparison. Not financial advice.
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Cadence Design Systems, Inc. is a large-cap Technology company with a mixed overall financial profile — it sits in the upper half of Technology stocks (38 of 82).
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The business is both profitable and financially healthy — it keeps a good portion of what it earns and carries its debt comfortably.
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The stock trades at a premium — investors are paying more per dollar of earnings than most S&P 500 companies. That's fine if strong growth justifies it, but leaves little room for disappointment.
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Growth is a clear strength — revenue and earnings are expanding faster than most peers, signalling strong demand for the company's products or services.
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This stock pays no dividend — your return depends entirely on the share price rising over time.
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The stock is more volatile than most S&P 500 names — it can swing sharply in both directions. This suits investors comfortable with bigger short-term moves.
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There are several areas of concern. This may suit investors with a higher risk tolerance or a specific contrarian view on the Technology sector.
At a glance
How it scores
We look at 31 different financial metrics and group them into categories. Here's how CDNS compares to the other S&P 500 stocks.
Dive deeper — all 31 metrics 9 categories · valuation, growth, health, dividends & more Show all Hide
Valuation
Is the stock cheap or expensive relative to its earnings, sales, and assets? Lower multiples often mean better value.
| Metric | Value | vs S&P 500 |
|---|---|---|
| P/E Ratio (Trailing) | 89.88 | Below avg |
| Forward P/E | 41.28 | Below avg |
| PEG Ratio | 3.68 | Below avg |
| Price to Sales | 19.33 | Below avg |
| Price to Book | 16.28 | Below avg |
| EV/EBITDA | 53.87 | Below avg |
| Earnings Yield | 1.11% | Below avg |
Profitability
How efficiently does the company turn revenue into profit? Higher margins mean more money kept from each dollar earned.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Gross Margin | 86.08% | Top 25% |
| Operating Margin | 29.70% | Top 25% |
| Net Profit Margin | 21.18% | Above avg |
| Return on Equity | 20.66% | Above avg |
| Return on Invested Capital | 10.39% | Top 25% |
Growth
How fast is the business expanding? Strong growth in revenue and earnings signals increasing market demand.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Revenue Growth (YoY) | 18.70% | Top 25% |
| Revenue Growth (3Y CAGR) | 14.14% | Top 25% |
| EPS Growth (YoY) | 23.00% | Above avg |
| Free Cash Flow Growth | 41.94% | Top 25% |
Health
Can the company cover its debts and obligations? A healthy balance sheet reduces the risk of financial trouble.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Current Ratio | 1.47 | Above avg |
| Debt to Equity | 0.47 | Top 25% |
| Interest Coverage | 14.06 | Above avg |
| Altman Z-Score | 16.09 | Top 25% |
Dividends
Does the company pay shareholders, and is that payment growing and sustainable?
| Metric | Value | vs S&P 500 |
|---|---|---|
| Dividend Yield | — | N/A |
| Payout Ratio | 0.00% | Top 25% |
| Dividend Growth (5Y) | — | N/A |
Cash Flow
Is real cash flowing into the business — not just accounting profits? Strong cash flow funds growth and dividends.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Free Cash Flow Yield | 1.34% | Below avg |
| OCF to Sales | 28.90% | Above avg |
Risk
How volatile is the stock compared to the broader market? Lower beta and volatility mean a smoother ride.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Beta (1-Year) | 1.15 | Average |
| Volatility (30-Day) | 49.49% | Below avg |
Sentiment
What do analysts and short-sellers think? High analyst ratings and low short interest signal broad confidence.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Short % of Float | 1.78% | Top 25% |
| Avg. Analyst Rating | 1.48 | Top 25% |
| Target Upside % | -0.52% | Below avg |
Size
How large is the company by market value? Size affects stability, growth potential, and index inclusion.
| Metric | Value | vs S&P 500 |
|---|---|---|
| Market Capitalization | 106.85B | Top 25% |
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