COMPOSITE RISK SCORE
55
MODERATE
VAL:9/25 · FIN:13/25 · GRO:15/25 · TECH:18/25
📖 P/B RATIO
15.8x
Price to Book
🏛 MARKET CAP
$88.1B
Large Cap
📊 ROE
20.7%
Return on Equity
Overview
Technical
Financials
Analysis
Verdict
🏢 Company Analysis · Cadence Design Systems, Inc.
💼 BUSINESS MODEL
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.. Operates in Software - Application within the Technology sector. Workforce of 15,110 employees.
🏰 MOAT & COMPETITION
Large-cap ($88B) — established player with meaningful market presence. ROE of 20.7% indicates strong competitive advantage and efficient capital deployment. Profit margin of 21.2% suggests pricing power / cost moat.
🚀 CATALYSTS
CDNS Q1 Deep Dive: AI Demand Drives Growth, Margin Guidance Adjusts Post-Hexagon Acquisition (StockStory) Revenue growing at 19% — strong top-line momentum. Earnings growth of 23% signals execution on profitability.
⚖️ ASYMMETRY CHECK
Analyst target range: $275 — $410 (mean $372, 27 analysts). Favorable asymmetry — upside potential of +29% vs downside floor of -14% (2.1x reward-to-risk).P/E of 74.3x — premium valuation , growth must sustain to avoid de-rating risk.
🔭 FUTURE OUTLOOK
Analyst consensus: Strong Buy (27 analysts). Latest quarter earnings grew 23% YoY — positive trajectory.
P/E at 74x
P/B at 15.8x
Analyst target: $371.53 (+16.5%)
1Y return: +5.5%
ROE: 20.7%
Profit margin: 21.2%
Revenue growth: 18.7%
Debt/Equity: 44%
Revenue growth: 18.7%
Earnings growth: 23.0%
Beta: 1.04
Sector: Technology
RSI, MACD, MA crossovers
200 DMA & 50 EMA position
Volume trend analysis
Price momentum signals
📈 Price Movement
1D 1W 1M
6M 1Y 3Y 5Y
🕯 Candlestick Chart
1D 1W 1M
6M 1Y 3Y 5Y
🎯 Price Prediction · Analyst Target Cone
📉 Valuation Trends (at current CMP)
P/E P/B MCap/Sales EPS
118.7
105.7
92.7
79.8
66.8
2022
2023
2024
2025
2022: 103.2 2023: 83.5 2024: 82.8 2025: 78.6 78.6
36.9
31.1
25.3
19.5
13.7
2022
2023
2024
2025
2022: 32.1 2023: 25.9 2024: 18.8 2025: 16.1 16.1
28.4
24.9
21.3
17.7
14.1
2022
2023
2024
2025
2022: 24.7 2023: 21.5 2024: 19.0 2025: 16.6 16.6
4.7
4.2
3.6
3.1
2.6
2022
2023
2024
2025
2022: 3.1 2023: 3.8 2024: 3.9 2025: 4.1 4.1
💎 Valuation & Financial Metrics
P/E RATIO
74.3x
Trailing twelve months
P/B RATIO
15.8x
Price to Book value
PROFIT MARGIN
21.2%
Net profit margin
OPM
29.3%
Operating profit margin
ANALYST TARGET
$371.53
Range: $275.00 - $410.00
PEG RATIO
2.95
Price/Earnings to Growth
EV/EBITDA
44.8x
Enterprise value ratio
CURRENT RATIO
1.47
Liquidity measure
DIVIDEND YIELD
N/A
Annual yield
GROSS MARGIN
86.1%
Gross profit margin
SECTOR BENCHMARKS — SOFTWARE - APPLICATION
P/E (fair) 35.0x (sector mid)
P/B (fair) 8.0x (sector mid)
ROE (good) 25% (sector target)
OPM (good) 25% (sector target)
D/E comfort <20 (sector)
📋 Quarterly Performance Trend
Quarter Revenue QoQ % Net Profit QoQ % Op. Cash Flow EBITDA Margin
Q4 '24
$1.4B —
$340.2M —
$441.4M
38.4%
Q1 '25
$1.2B -8.4%
$273.6M -19.6%
$487.0M
35.1%
Q2 '25
$1.3B +2.7%
$160.1M -41.5%
$377.6M
28.8%
Q3 '25
$1.3B +5.0%
$287.1M +79.4%
$310.7M
35.7%
Q4 '25
$1.4B +7.6%
$388.1M +35.2%
$553.5M
41.1%
Q1 '26
N/A —
N/A —
N/A
N/A
📊 Year-on-Year Trend
FY Revenue YoY % Net Profit YoY % Op. Cash Flow YoY %
2022
$3.6B —
$849.0M —
$1.2B —
2023
$4.1B +14.8%
$1.0B +22.6%
$1.3B +8.6%
2024
$4.6B +13.5%
$1.1B +1.4%
$1.3B -6.6%
2025
$5.3B +14.1%
$1.1B +5.1%
$1.7B +37.1%
📈 Revenue vs Earnings
Quarterly
Annual
💰 How Cadence Design Systems, Inc. Makes Its Money
Quarterly
Annual
Revenue
$1.4B
Cost of Revenue
$189M
Gross Profit
$1.3B
R&D
$465M
SG&A
$310M
Operating Inc.
$465M
Tax
$105M
Interest
$29M
Other
$32M
Net Income
$388M
(27.0% margin)
Dec 2025 · All values in $ Millions
Revenue
$1.3B
Cost of Revenue
$182M
Gross Profit
$1.2B
R&D
$423M
SG&A
$271M
Operating Inc.
$453M
Tax
$106M
Interest
$29M
Other
$56M
Net Income
$287M
(21.4% margin)
Sep 2025 · All values in $ Millions
Revenue
$1.3B
Cost of Revenue
$184M
Gross Profit
$1.1B
R&D
$442M
SG&A
$270M
Operating Inc.
$370M
Tax
$121M
Interest
$29M
Other
$87M
Net Income
$160M
(12.5% margin)
Jun 2025 · All values in $ Millions
Revenue
$5.3B
Cost of Revenue
$722M
Gross Profit
$4.6B
R&D
$1.8B
SG&A
$1.1B
Operating Inc.
$1.6B
Tax
$413M
Interest
$117M
Other
$113M
Net Income
$1.1B
(20.9% margin)
Dec 2025 · All values in $ Millions
Revenue
$4.6B
Cost of Revenue
$648M
Gross Profit
$4.0B
R&D
$1.5B
SG&A
$1.0B
Operating Inc.
$1.4B
Tax
$340M
Interest
$76M
Other
$26M
Net Income
$1.1B
(22.7% margin)
Dec 2024 · All values in $ Millions
Revenue
$4.1B
Cost of Revenue
$435M
Gross Profit
$3.7B
R&D
$1.4B
SG&A
$933M
Operating Inc.
$1.3B
Tax
$241M
Interest
$36M
Other
$26M
Net Income
$1.0B
(25.5% margin)
Dec 2023 · All values in $ Millions
Revenue
$3.6B
Cost of Revenue
$372M
Gross Profit
$3.2B
R&D
$1.3B
SG&A
$846M
Operating Inc.
$1.1B
Tax
$196M
Interest
$23M
Net Income
$849M
(23.8% margin)
Dec 2022 · All values in $ Millions
Dec 2025
Sep 2025
Jun 2025
🏦 Snapshot of Cadence Design Systems, Inc.'s Balance Sheet
Quarterly
Annual
Total Assets
$10.2B
Cash & Equiv.: $3.0B (29.6%)
Receivables: $493M (4.9%)
Inventory: $304M (3.0%)
Other Current: $872M (8.6%)
PP&E: $693M (6.8%)
Goodwill: $2.7B (27.1%)
Other Intangibles: $718M (7.1%)
Other Non-Curr.: $1.3B (13.0%)
Liab. + Equity
$10.2B
Current Liab.: $1.6B (16.1%)
Long-Term Debt: $2.5B (24.4%)
Other Liab.: $564M (5.6%)
Equity: $5.5B (53.9%)
As of Dec 2025 · All values in $ Millions
Total Assets
$9.6B
Cash & Equiv.: $2.8B (28.7%)
Receivables: $384M (4.0%)
Inventory: $286M (3.0%)
Other Current: $864M (9.0%)
PP&E: $495M (5.2%)
Goodwill: $2.6B (27.6%)
Other Intangibles: $673M (7.0%)
Other Non-Curr.: $1.5B (15.6%)
Liab. + Equity
$9.6B
Current Liab.: $1.4B (14.7%)
Long-Term Debt: $2.5B (25.8%)
Other Liab.: $515M (5.4%)
Equity: $5.2B (54.2%)
As of Sep 2025 · All values in $ Millions
Total Assets
$9.5B
Cash & Equiv.: $2.8B (29.7%)
Receivables: $359M (3.8%)
Inventory: $226M (2.4%)
Other Current: $815M (8.6%)
PP&E: $482M (5.1%)
Goodwill: $2.6B (27.3%)
Other Intangibles: $619M (6.5%)
Other Non-Curr.: $1.6B (16.7%)
Liab. + Equity
$9.5B
Current Liab.: $1.5B (15.7%)
Long-Term Debt: $2.5B (26.1%)
Other Liab.: $527M (5.5%)
Equity: $5.0B (52.7%)
As of Jun 2025 · All values in $ Millions
Total Assets
$9.0B
Cash & Equiv.: $2.8B (30.8%)
Receivables: $315M (3.5%)
Inventory: $226M (2.5%)
Other Current: $680M (7.5%)
PP&E: $466M (5.2%)
Goodwill: $2.4B (26.8%)
Other Intangibles: $584M (6.5%)
Other Non-Curr.: $1.5B (17.1%)
Liab. + Equity
$9.0B
Current Liab.: $1.3B (14.4%)
Long-Term Debt: $2.5B (27.5%)
Other Liab.: $459M (5.1%)
Equity: $4.8B (53.0%)
As of Mar 2025 · All values in $ Millions
Total Assets
$10.2B
Cash & Equiv.: $3.0B (29.6%)
Receivables: $493M (4.9%)
Inventory: $304M (3.0%)
Other Current: $872M (8.6%)
PP&E: $693M (6.8%)
Goodwill: $2.7B (27.1%)
Other Intangibles: $718M (7.1%)
Other Non-Curr.: $1.3B (13.0%)
Liab. + Equity
$10.2B
Current Liab.: $1.6B (16.1%)
Long-Term Debt: $2.5B (24.4%)
Other Liab.: $564M (5.6%)
Equity: $5.5B (53.9%)
As of Dec 2025 · All values in $ Millions
Total Assets
$9.0B
Cash & Equiv.: $2.6B (29.5%)
Receivables: $393M (4.4%)
Inventory: $258M (2.9%)
Other Current: $721M (8.0%)
PP&E: $604M (6.7%)
Goodwill: $2.4B (26.5%)
Other Intangibles: $595M (6.6%)
Other Non-Curr.: $1.4B (15.4%)
Liab. + Equity
$9.0B
Current Liab.: $1.4B (15.3%)
Long-Term Debt: $2.5B (27.6%)
Other Liab.: $455M (5.1%)
Equity: $4.7B (52.1%)
As of Dec 2024 · All values in $ Millions
Total Assets
$5.7B
Cash & Equiv.: $1.0B (17.8%)
Receivables: $300M (5.3%)
Inventory: $182M (3.2%)
Other Current: $487M (8.6%)
PP&E: $554M (9.8%)
Goodwill: $1.5B (27.1%)
Other Intangibles: $337M (5.9%)
Other Non-Curr.: $1.3B (22.3%)
Liab. + Equity
$5.7B
Current Liab.: $1.6B (28.1%)
Long-Term Debt: $300M (5.3%)
Other Liab.: $375M (6.6%)
Equity: $3.4B (60.0%)
As of Dec 2023 · All values in $ Millions
Total Assets
$5.1B
Cash & Equiv.: $882M (17.2%)
Receivables: $315M (6.1%)
Inventory: $128M (2.5%)
Other Current: $382M (7.4%)
PP&E: $542M (10.5%)
Goodwill: $1.4B (26.8%)
Other Intangibles: $355M (6.9%)
Other Non-Curr.: $1.2B (22.6%)
Liab. + Equity
$5.1B
Current Liab.: $1.3B (26.2%)
Long-Term Debt: $648M (12.6%)
Other Liab.: $396M (7.7%)
Equity: $2.7B (53.4%)
As of Dec 2022 · All values in $ Millions
Dec 2025
Sep 2025
Jun 2025
Mar 2025
💸 Looking into Cadence Design Systems, Inc.'s Cash Flow
Quarterly
Annual
Operating CF
$553M
Capital Exp.
$41M
Free Cash Flow
$512M
Buybacks
$222M
Retained / Other
$291M
FY2025 · All values in $ Millions
Operating CF
$311M
Capital Exp.
$34M
Free Cash Flow
$277M
Buybacks
$254M
Retained / Other
$23M
FY2025 · All values in $ Millions
Operating CF
$378M
Capital Exp.
$44M
Free Cash Flow
$334M
Buybacks
$197M
Retained / Other
$137M
FY2025 · All values in $ Millions
Operating CF
$487M
Capital Exp.
$23M
Free Cash Flow
$464M
Buybacks
$423M
Retained / Other
$41M
FY2025 · All values in $ Millions
Operating CF
$1.7B
Capital Exp.
$142M
Free Cash Flow
$1.6B
Buybacks
$1.1B
Retained / Other
$492M
FY2025 · All values in $ Millions
Operating CF
$1.3B
Capital Exp.
$143M
Free Cash Flow
$1.1B
Buybacks
$788M
Debt Repaid
$1.4B
FY2024 · All values in $ Millions
Operating CF
$1.3B
Capital Exp.
$103M
Free Cash Flow
$1.2B
Buybacks
$837M
Debt Repaid
$150M
Retained / Other
$260M
FY2023 · All values in $ Millions
Operating CF
$1.2B
Capital Exp.
$124M
Free Cash Flow
$1.1B
Buybacks
$1.2B
Debt Repaid
$485M
FY2022 · All values in $ Millions
FY2025
FY2025
FY2025
FY2025
🎯 EPS: Estimate vs Actual
Estimates
Quarterly
Annual
📅 Quarterly Results
Item Mar '26 Dec '25 Sep '25 Jun '25 Mar '25 Dec '24 Total Revenue — $1.44B $1.34B $1.28B $1.24B $1.36B Cost of Revenue — $188.7M $182.2M $184.2M $167.1M $220.0M Gross Profit — $1.25B $1.16B $1.09B $1.08B $1.14B Operating Expense — $786.2M $703.9M $720.9M $713.8M $680.1M Operating Income — $465.2M $452.8M $370.4M $361.4M $455.9M Interest Expense — $29.4M $29.0M $28.9M $29.1M $29.9M Pretax Income — $493.0M $392.8M $280.6M $355.7M $436.7M Tax Provision — $104.8M $105.7M $120.6M $82.1M $96.4M Net Income — $388.1M $287.1M $160.1M $273.6M $340.2M EBITDA — $591.3M $477.6M $367.3M $436.3M $520.4M EPS (Basic) $1.23 $1.43 $1.06 $0.59 $1.01 — EPS (Diluted) $1.23 $1.42 $1.05 $0.59 $1.00 — Shares Outstanding 273.7M 272.9M 273.8M 272.9M 273.6M —
📊 Profit & Loss Statement
Item Dec '25 Dec '24 Dec '23 Dec '22 Total Revenue $5.30B $4.64B $4.09B $3.56B Cost of Revenue $722.2M $647.5M $435.0M $371.6M Gross Profit $4.57B $3.99B $3.65B $3.19B Operating Expense $2.92B $2.61B $2.39B $2.12B Operating Income $1.65B $1.38B $1.26B $1.07B Interest Expense $116.5M $76.0M $36.2M $22.9M Pretax Income $1.52B $1.40B $1.28B $1.05B Tax Provision $413.2M $340.3M $240.8M $196.4M Net Income $1.11B $1.06B $1.04B $849.0M EBITDA $1.87B $1.67B $1.46B $1.20B EPS (Basic) $4.09 $3.89 $3.86 $3.13 EPS (Diluted) $4.06 $3.85 $3.82 $3.09 Shares Outstanding 273.3M 273.8M 272.7M 275.0M
🏦 Balance Sheet
Item Dec '25 Dec '24 Dec '23 Dec '22 Dec '21 Total Assets $10.15B $8.97B $5.67B $5.14B — Current Assets $4.67B $4.02B $1.98B $1.71B — Cash & Equivalents $3.00B $2.64B $1.01B $882.3M — Accounts Receivable $492.8M $393.0M $299.8M $314.7M — Inventory $303.5M $257.7M $181.7M $128.0M — Non-Current Assets $5.48B $4.96B $3.69B $3.43B — Property Plant & Equip $693.0M $604.4M $554.0M $541.8M — Goodwill $2.75B $2.38B $1.54B $1.37B — Intangible Assets $3.47B $2.97B $1.87B $1.73B — Total Liabilities $4.68B $4.30B $2.27B $2.39B — Current Liabilities $1.64B $1.37B $1.59B $1.35B — Accounts Payable $93.5M $5.6M $91.2M $47.1M — Short-Term Debt — — $349.3M $100.0M — Long-Term Debt $2.48B $2.48B $299.8M $648.1M — Total Equity $5.47B $4.67B $3.40B $2.75B — Retained Earnings $7.10B $5.99B $4.94B $3.90B — Book Value/Share 2.01B 1.70B 1.53B 1.02B —
💰 Cash Flow Statement
Item Dec '25 Dec '24 Dec '23 Dec '22 Dec '21 Operating Cash Flow $1.73B $1.26B $1.35B $1.24B — Depreciation & Amort. $233.8M $195.0M $145.7M $135.4M — Change in Working Cap $-73.3M $-209.0M $-98.8M $87.5M — Capital Expenditure $-141.9M $-142.5M $-102.5M $-124.2M — Free Cash Flow $1.59B $1.12B $1.25B $1.12B — Investing Cash Flow $-460.5M $-837.1M $-412.2M $-738.6M — Acquisitions $-429.5M $-737.6M $-198.4M $-613.8M — Financing Cash Flow $-949.0M $1.24B $-803.6M $-657.0M — Debt Issued $0 $3.20B $50.0M $885.0M — Debt Repaid $0 $-1.35B $-150.0M $-485.0M — Share Buyback $-1.09B $-787.8M $-836.5M $-1.16B — Net Change in Cash $319.3M $1.66B $133.4M $-153.8M —
📈 Key Financial Ratios
Ratio FY2025 FY2024 FY2023 FY2022 Gross Margin % 86.4% 86.0% 89.4% 89.6% Operating Margin % 31.1% 29.8% 30.9% 30.1% Net Margin % 20.9% 22.7% 25.5% 23.8% EBITDA Margin % 35.4% 35.9% 35.8% 33.8% ROE % 20.3% 22.6% 30.6% 30.9% ROA % 10.9% 11.8% 18.4% 16.5% Debt/Equity % 47.8% 55.3% 22.5% 32.3% Current Ratio 2.86 2.93 1.24 1.27 FCF Margin % 30.0% 24.1% 30.5% 31.4% Asset Turnover 0.52 0.52 0.72 0.69
🚀 Compounded Growth Rates
Revenue
1-Year +14.1% 3-Year CAGR +13.8%
Net Profit
1-Year +5.1% 3-Year CAGR +3.2%
EPS
1-Year +5.5% 3-Year CAGR +3.1%
🏭 Industry Peers — Software - Application
Ticker Company Price P/E P/B MCap ROE Margin Rev Growth AAPL Apple Inc. $269.05 34.1 44.9 $3,950.0B 152.0% 27.0% 15.7% MSFT Microsoft Corporation $424.23 26.6 8.1 $3,153.0B 34.4% 39.0% 16.7% GOOGL Alphabet Inc. $350.63 32.4 10.2 $4,241.7B 35.7% 32.8% 18.0% META Meta Platforms, Inc. $672.03 28.6 7.8 $1,705.9B 30.2% 30.1% 23.8% NVDA NVIDIA Corporation $210.53 43.0 32.5 $5,117.1B 101.5% 55.6% 73.2% ORCL Oracle Corporation $162.82 29.2 14.0 $468.3B 57.6% 25.3% 21.7% CRM Salesforce, Inc. $180.33 23.1 2.8 $147.5B 12.4% 18.0% 12.1% ADBE Adobe Inc. $241.50 14.1 8.6 $97.6B 58.8% 29.5% 12.0%
Peers selected from Technology sector · Data from Yahoo Finance
🏛 Shareholding Pattern
TOP HOLDERS
Holder Type Shares % Held Vanguard Group Inc Inst 27,231,070 9.86% Blackrock Inc. Inst 26,146,775 9.47% State Street Corporation Inst 12,603,368 4.56% FMR, LLC Inst 9,883,842 3.58% Jennison Associates LLC Inst 7,715,550 2.79% VANGUARD INDEX FUNDS-Vanguard Total MF 8,554,120 3.10% VANGUARD INDEX FUNDS-Vanguard 500 I MF 6,864,483 2.49% Invesco QQQ Trust, Series 1 MF 5,790,142 2.10%
🟢 CATALYSTS
🏆 Positive Revenue Growth: Revenue growing at 18.7% YoY.
💹 Analyst Upside (16%): Mean target of $371.53 above current price.
🔀 Earnings Growth (23%): Above sector norm — strong profit expansion.
🔴 RISKS
📜 Elevated P/E (74.3x): Above sector expensive threshold of 60x.
💰 Market Risk: Broader market correction or sentiment shift could impact stock.
🔓 Sector Risk: Regulatory or competitive changes in Technology space.
🕸 Factor Analysis · Radar
Momentum 6/10: 1M +17.7%, 6M -6.6%, RSI 56, MACD bullish, Below 200DMA Sentiment 8/10: Analyst upside +16.5%, Rec: strong buy Value 0/10: P/E 74.3, P/B 15.8, PEG 2.95, EV/EBITDA 44.8 Quality 7/10: ROE 20.7%, Margin 21.2%, D/E 44, CR 1.47 Low Volatility 5/10: Beta 1.04, Ann. vol 37% Momentum
6
Sentiment
8
Value
0
Quality
7
Low Vol
5
Momentum 6/10 1M +17.7%, 6M -6.6%, RSI 56, MACD bullish, Below 200DMA
Sentiment 8/10 Analyst upside +16.5%, Rec: strong buy
Value 0/10 P/E 74.3, P/B 15.8, PEG 2.95, EV/EBITDA 44.8
Quality 7/10 ROE 20.7%, Margin 21.2%, D/E 44, CR 1.47
Low Volatility 5/10 Beta 1.04, Ann. vol 37%
🎯 Decision Matrix — Game Theory
Action If Stock Rises If Stock Falls
BUY Capture 16.5% analyst upside OPM of 29% provides margin buffer HOLD Retain existing position; wait for better entry Miss further upside if momentum continues; 1M return of +17.7% shows momentum SELL Lock in +5.5% 1Y return Avoid further drawdown
REASONS TO BUY
Analyst upside of 16.5% with mean target of $371.53
Revenue growing at 18.7% YoY (sector norm: 12%)
Operating margin of 29% shows pricing power (sector norm: 25%)
REASONS TO SELL / AVOID
P/E of 74.3x exceeds sector expensive threshold of 60x
Cadence Design Systems, Inc. trades at $318.92 with a composite risk score of 55/100.
The stock scores 9/25 on valuation, 13/25 on financial health, 15/25 on growth, and 18/25 on technicals.
The company is currently profitable with strong return on equity.
Bottom Line: Neutral for Technology — wait for better entry or catalyst. The current recommendation is HOLD .
PROFITABLE
HIGH ROE
UPSIDE POTENTIAL
EXPENSIVE