Cadence Design Systems (CDNS) Stock Analysis
This is a peer-relative look at Cadence Design Systems (CDNS): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Software & Services peers, so every number reads in context rather than in isolation.
Company Profile
| Profile Item | CDNS |
|---|---|
| Name | Cadence Design Systems, Inc. |
| Country/Region | United States |
| GICS Sector | Information Technology |
| GICS Industry Group | Software & Services |
| GICS Industry | Software |
| GICS Sub-Industry | Application Software |
| Market Capitalization | 87.78 billion USD |
| Currency | USD |
| Exchange | Nasdaq |
| Listing Date | June 10, 1987 |
| Security Type | Common Stock |
Price Performance
Cumulative Growth
Trailing Returns
Calendar-Year Returns
Performance Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| Total Return (1Y) | 3.07% | -3.00% |
| Total Return (3Y, Annualized) | 9.32% | 8.28% |
| Total Return (5Y, Annualized) | 12.93% | -7.91% |
Risk Profile
Drawdown History
Return Distribution
Risk Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| Volatility (1Y, Annualized) | 42.21% | 61.69% |
| Beta (5Y) | 1.09 | 1.06 |
| Max Drawdown (5Y) | -34.21% | -76.52% |
Risk-Adjusted Performance
Risk-Return Positioning
Risk-Adjusted Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| Sharpe Ratio (1Y) | -0.03 | -0.13 |
| Sortino Ratio (1Y) | -0.04 | -0.19 |
Profitability
ROE (TTM)
Cadence Design Systems (CDNS) posts ROE of 22.87%, in the upper peer quartile. That suggests the company earns more from each dollar of shareholders’ equity than most industry peers, a useful capital-efficiency signal.
CDNS
Software & Services industry group
22.87%
Group distribution
- Max
- 53.85%
- CDNS
- 22.87%
- Q3
- 17.90%
- Median
- 6.59%
- Q1
- -9.59%
- Min
- -50.52%
Largest peers
- ORCL
- 41.19%
- PLTR
- 40.91%
- IBM
- 34.77%
- MSFT
- 34.22%
- CDNS
- 22.87%
- SAP
- 18.18%
- PANW
- 1.74%
Net Margin (TTM)
Cadence Design Systems (CDNS) keeps 22.52% of revenue as net profit, putting net margin in the upper peer quartile. After operating costs, interest, and taxes, more of each sales dollar reaches shareholders than it does at most industry peers.
CDNS
Software & Services industry group
22.52%
Group distribution
- Max
- 41.17%
- CDNS
- 22.52%
- Q3
- 15.28%
- Median
- 4.63%
- Q1
- -5.42%
- Min
- -33.17%
Largest peers
- PLTR
- 50.34%
- MSFT
- 41.17%
- ORCL
- 26.36%
- CDNS
- 22.52%
- SAP
- 20.41%
- IBM
- 15.99%
- PANW
- 2.67%
Operating Margin (TTM)
Cadence Design Systems (CDNS) turns 28.93% of revenue into operating profit, putting operating margin in the upper peer quartile. Before financing and taxes enter the picture, the day-to-day business keeps more of each sales dollar than most industry peers.
CDNS
Software & Services industry group
28.93%
Group distribution
- Max
- 46.89%
- CDNS
- 28.93%
- Q3
- 17.64%
- Median
- 8.73%
- Q1
- -2.13%
- Min
- -30.45%
Largest peers
- MSFT
- 49.76%
- PLTR
- 46.89%
- ORCL
- 35.63%
- SAP
- 29.50%
- CDNS
- 28.93%
- IBM
- 16.97%
- PANW
- 5.40%
Profitability Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| ROE (TTM) | 22.87% | 6.59% |
| ROA (TTM) | 10.52% | 2.45% |
| Net Margin (TTM) | 22.52% | 4.63% |
| Operating Margin (TTM) | 28.93% | 8.73% |
| Gross Margin (TTM) | 85.68% | 70.07% |
Growth
Revenue Growth
Cadence Design Systems (CDNS) grew revenue 14.12%, roughly around the peer group's normal range. Top-line momentum looks broadly typical for the industry.
EPS Growth
Cadence Design Systems (CDNS) grew earnings per share 5.45%, roughly around the peer group's normal range. Bottom-line momentum looks broadly typical for the industry.
Growth Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| Revenue Growth (YoY) | 14.12% | 14.22% |
| Revenue Growth (3Y CAGR) | 14.14% | 13.52% |
| EPS Growth (YoY) | 5.45% | 7.85% |
| EPS Growth (3Y CAGR) | 9.53% | 18.19% |
Financial Strength
Current Ratio (MRQ)
Cadence Design Systems (CDNS) has current ratio of 1.36, in the healthier middle range for its industry. The short-term asset cushion looks balanced relative to peers rather than stretched thin.
CDNS
Software & Services industry group
1.36
Group distribution
- Max
- 5.11
- Q3
- 2.77
- Median
- 1.67
- CDNS
- 1.36
- Q1
- 1.01
- Min
- 0.03
Largest peers
- PLTR
- 7.10
- CDNS
- 1.36
- MSFT
- 1.23
- ORCL
- 1.17
- SAP
- 1.16
- PANW
- 0.87
- IBM
- 0.86
Debt / Equity (MRQ)
Cadence Design Systems (CDNS) has debt-to-equity ratio of 0.41, roughly in line with the peer group’s normal leverage range. Its mix of debt and equity looks typical for the industry.
CDNS
Software & Services industry group
0.41
Group distribution
- Max
- 2.52
- Q3
- 1.13
- CDNS
- 0.41
- Median
- 0.40
- Q1
- 0.07
- Min
- 0.00
Largest peers
- ORCL
- 2.52
- IBM
- 1.85
- CDNS
- 0.41
- MSFT
- 0.28
- SAP
- 0.23
- PANW
- 0.09
- PLTR
- 0.02
Financial Strength Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| Current Ratio (MRQ) | 1.36 | 1.67 |
| Debt / Equity (MRQ) | 0.41 | 0.40 |
| Net Debt / EBITDA | 0.57 | 0.17 |
Dividends
Dividend Yield (TTM)
Cadence Design Systems (CDNS) pays no dividend, leaving dividend yield at 0.00% this period. Shareholders may still receive value through reinvestment or buybacks, but there is no dividend income to compare here.
CDNS
Software & Services industry group
0.00%
Group distribution
- CDNS
- 0.00%
- Max
- 0.00%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
Largest peers
- IBM
- 2.73%
- ORCL
- 1.74%
- SAP
- 1.03%
- MSFT
- 0.69%
- CDNS
- 0.00%
- PLTR
- 0.00%
- PANW
- 0.00%
Dividend Payout Ratio (TTM)
Cadence Design Systems (CDNS) paid no earnings out as dividends this period, leaving payout ratio at 0.00%. There is no dividend payout to size against earnings.
CDNS
Software & Services industry group
0.00%
Group distribution
- CDNS
- 0.00%
- Max
- 0.00%
- Q3
- 0.00%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
Largest peers
- IBM
- 57.51%
- SAP
- 36.45%
- ORCL
- 31.35%
- MSFT
- 19.00%
- CDNS
- 0.00%
- PLTR
- 0.00%
- PANW
- 0.00%
Dividend Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 0.00% |
| Dividend Payout Ratio (TTM) | 0.00% | 0.00% |
Valuation
P/E Ratio (TTM)
Cadence Design Systems (CDNS) trades at P/E ratio of 63.60, in the richer earnings-multiple quartile for its industry. That premium needs support from growth, durable earnings, or stronger business quality.
CDNS
Software & Services industry group
63.60
Group distribution
- Max
- 112.94
- CDNS
- 63.60
- Q3
- 60.32
- Median
- 32.91
- Q1
- 18.77
- Min
- 6.69
Largest peers
- PANW
- 784.60
- PLTR
- 112.94
- CDNS
- 63.60
- SAP
- 29.07
- MSFT
- 27.69
- IBM
- 20.90
- ORCL
- 18.20
P/S Ratio (TTM)
Cadence Design Systems (CDNS) trades at 14.31 on P/S ratio, in the higher sales-valuation quartile. Investors are paying up for each dollar of revenue, so stronger margins, growth, or revenue quality need to carry that price.
CDNS
Software & Services industry group
14.31
Group distribution
- Max
- 17.91
- CDNS
- 14.31
- Q3
- 8.78
- Median
- 4.25
- Q1
- 2.23
- Min
- 0.02
Largest peers
- PLTR
- 53.02
- PANW
- 22.37
- CDNS
- 14.31
- MSFT
- 11.37
- SAP
- 6.84
- ORCL
- 5.04
- IBM
- 3.31
P/B Ratio (MRQ)
Cadence Design Systems (CDNS) trades at 12.77 on P/B ratio, in the higher book-value quartile. The market is paying a premium to book, so stronger ROE, cleaner assets, or a better growth profile need to justify it.
CDNS
Software & Services industry group
12.77
Group distribution
- Max
- 16.63
- CDNS
- 12.77
- Q3
- 8.50
- Median
- 4.30
- Q1
- 1.92
- Min
- -3.90
Largest peers
- SAP
- 73.25
- PLTR
- 34.41
- CDNS
- 12.77
- PANW
- 9.30
- MSFT
- 8.38
- IBM
- 6.52
- ORCL
- 5.68
Valuation Metrics
| Metric | Current stock: CDNS | Industry group median |
|---|---|---|
| P/E Ratio (TTM) | 63.60 | 32.91 |
| P/S Ratio (TTM) | 14.31 | 4.25 |
| P/B Ratio (MRQ) | 12.77 | 4.30 |
| Free Cash Flow Yield (TTM) | 1.99% | 3.98% |