Cadence Design Systems (CDNS) Stock Fundamentals, Analysis & Risk Signals

Health score, price, valuation, risk signals, and key metrics at a glance.

Cadence Design Systems

NasdaqGS•Technology•Software - Application

$323.75-5.76(-0.02%)After hours

Market Cap

$88.63B

P/E

64.2x

P/S

14.5x

P/B

12.9x

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 Innovus 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 Tensilica, a digital signal processor. In addition, the company's design IP portfolio includes serializer/deserializer, peripheral component interconnect, USB, and other standard protocols; and Secure-IC, a solution for embedded security IP. Additionally, it provides System Design and Analysis (SD&A) platform, a solution that enables end-to-end system-level design and verification across chips, packages, PCBs, and electronic systems; Allegro X and Orca X platforms for PCB and advanced packaging; Sigrity X for signal and power integrity; AIR for RF design; Fidelity for computational fluid dynamics; Celsius for thermal and airflow analysis; Clarity 3D solver for electromagnetic and power electronics analysis and simulation; Integrity 3D-IC solution for 3D-IC and multi-chiplet designs; the Optimality Intelligent System Explorer, Reality digital twin, and Millennium enterprise multiphasic platforms; Allegro system design platform; and molecular modeling and simulation solutions and services. The company has a strategic collaboration with NVIDIA. The company was incorporated in 1987 and is headquartered in San Jose, California.

How this company scores

ExcellentMetricSide Score: 94/100

Strongest: Cash & Earnings Quality (25/25); weakest: Profitability (22/25).

Profitability22/25

Growth24/25

Balance Sheet & Red Flags23/25

Cash & Earnings Quality25/25

Strengths

Growing revenueRising free cash flowStrong marginsHigh ROE

No red flags in the last 8 quarters.

Valuation vs. 5-year range

Today's multiple positioned against its own trailing range — a visual premium/discount check.

P/E · 64.2x5y range 51.0x – 89.1x

Currently near its 20-quarter median.

P/S · 14.5x5y range 12.2x – 20.6x

Currently near its 20-quarter median.

P/B · 12.9x5y range 11.2x – 23.6x

Currently near its 20-quarter median.

Price & Volume

Market Cap $88.63B

Metrics at a Glance

as of September 2026

Revenue & Profit

Revenue, EBITDA, operating income, net income, EPS, and shares

TTM Revenue: $6.13B
Q. Revenue: $1.63B
TTM EBITDA: $2.27B
TTM Op. Income: $1.77B
Q. Op. Income: $428.72M
TTM Net Income: $1.38B
Q. Net Income: $289.75M
EPS: $1.06
Shares Out.: $273.75M

$6.13B in TTM revenue grew 17.6% YoY, reaching $1.63B last quarter. TTM EBITDA of $2.27B and TTM operating income of $1.77B show growth is flowing through to the bottom line. TTM net income of $1.38B means revenue is converting into profit. Across the last 8 quarters, TTM revenue has risen for 7 consecutive quarters — an improving trend.

Margins

Gross, EBITDA, operating, and net margin trends

EBITDA Margin: 33.5%
Op. Margin: 26.2%
Net Margin: 17.7%

Op. margin of 26.2% is down 5.5% YoY — costs are rising relative to revenue. Net margin at 17.7% Across the last 8 quarters, operating margin has fallen for 3 consecutive quarters — a weakening trend.

Price Ratios

P/E, P/S, P/B, EV/EBITDA, FCF yield, and earnings yield

P/E Ratio: 64.2x
P/S Ratio: 14.5x
P/B Ratio: 12.9x

At 64.2x P/E, the stock trades above typical market levels — the market expects above-average growth. P/S of 14.5x and P/B of 12.9x provide additional context. Use the growth and margin sections to judge whether the multiple is justified. Over the past year, P/E is down 28% — an improving trend.

Assets & Liabilities

Total assets, cash, debt, book value, and leverage

Total Assets: $12.22B
Cash: $1.45B
Long-Term Debt: $1.98B
Book Value: $6.88B
D/E Ratio: 0.3
Debt/EBITDA: 3.6

With $12.22B in assets and $1.98B in long-term debt, D/E is 0.3and book value is $6.88B — a conservative capital structure with a cushion to weather downturns. Across the last 8 quarters, debt/equity has fallen for 7 consecutive quarters — an improving trend.

Cash Flow

Operating cash flow, free cash flow, FCF margin, and earnings quality

Op. Cash Flow: $423.73M
TTM Free Cash Flow: $1.76B
FCF Margin: 28.8%
FCF / Net Income: 1.3

TTM FCF of $1.76B on $423.73M in operating cash flow. The FCF / Net Income ratio of 1.3x means free cash flow covers net income — earnings are backed by cash. Across the last 8 quarters, free cash flow has risen for 2 consecutive quarters — an improving trend.