Cadence Design Systems Inc (CDNS) Fair Value & Analysis
Technology · US · Market cap $106B · ISIN US1273871087
What is Cadence Design Systems Inc really worth?
Cadence Design Systems Inc
CDNS · US
A solid business, but trading 171% above our fair value of $112.57.
Strengths
Risks
Fair value as of: Aug 31, 2026
From 26 valuation models · updated 5 days ago
Share price −10.5% over the past month.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
What matters now
- A high-quality business (quality 73/100), yet the market already pays well above fair value. Quality at a full price, with little margin of safety.
- The price sits above even our optimistic bull case ($140.71). The favourable scenario is already priced in.
- A fairly wide model range ($72.54 to $140.71) leaves room in how you read the outcome.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 31, 2026.
How to read this chart
60‑month range $123.94 – $416.39 · fair‑value band $72.54 – $140.71 · the $304.88 price screens above the $112.57 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). 1 fiscal year is left out: there the valuation rested on only a fraction of the usual models. Dashed = 300-day average. As of Aug 31, 2026.
Analysis
Cadence Design Systems Inc (CDNS) currently trades at $304.88, while our model-based Fair Value estimate is $112.57, implying the stock looks roughly 170.9% overvalued today. The Quality Score stands at 73/100 (solid quality), in the Technology sector. Bull case: the DCF Models group reads highest at a median of $124.90 per share, and 0 of the 26 models we run sit above the $304.88 price. Bear case: the Asset-Based group reads lowest at $13.30, and 26 of the 26 models stay below the price. Evidence for this calculation is high.
Over the trailing twelve months, Cadence Design Systems Inc generated revenue of $5.5B at a net margin of 21.2%. Revenue grew 18.7% year over year. It earns a return on equity of 20.7%. The balance sheet holds a net cash position of $521M. Fundamentals as of Aug 31, 2026
Our scenario range runs from $72.54 (bear case) to $140.71 (bull case); at $304.88, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 27% below its 52-week high and 16% above its 52-week low, currently below its 200-day average. For context, the median of 10 Technology peers we cover trades at −38% fair-value upside, at −63%, CDNS screens richer than that median.
Fair Value models
This estimate rests on fiscal year 2025 figures, and about 8 months have passed since. In that time the company retained roughly $2.91 per share, which is 2.6 % of the fair value. The fair value deliberately does not add this in: the models value reported figures, not a projection.
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted, family-balanced blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small. Every input is real reported data, nothing guessed.
All 26 models by family
Widest divergence: DCF Models ($124.90) versus Asset-Based ($13.30). Highest evidence: FCF DCF (78).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Aug 31, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 73 · Market factors (momentum, volatility) 33
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
About the company
Cadence Design Systems, Inc. develops computational, AI-driven software, hardware, and silicon intellectual property products and solutions.
Full company description
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. 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.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2021 – FY2025 · reported fiscal years
Cadence Design Systems Inc reported revenue of $5.3B in FY2025 versus $3.0B in FY2021, a compound +15.4%/yr. Reported net income was $1.1B in FY2025, compounding +12.4%/yr from FY2021.
of which total revenue +11.9 % · buybacks/dilution +1.2 %
Annual growth per factor. These are factors, not summands: multiplied they give the EPS growth rate, added they do not quite. Start and end points are 3-year averages (details on hover).
CDNS screens 171% overvalued. Compare with SAP SE →
Recent news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- Cadence Design Systems (CDNS) Falls More Steeply Than Broader Market: What Investors Need to Know
- Commvault, Sprinklr, Upland Software, Samsara, and Cadence Design Systems Stocks Trade Down, What You Need To Know
- Cadence Subsystem for PCIe 6.0 Architecture Achieves First-Pass PCI Express Specification Compliance
- Can Cadence's Cash Generation Support Both Growth and Share Buybacks?
Peer Group
Software - Application · 691 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs Software - Application median · lower = cheaper
Strength profile in five axes (Snowflake)
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
VALUE 0: the price sits above our fair-value range.
Insider activity: 42/100
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
Similar stocks
10 more Software - Application stocks, each showing price versus our Fair Value estimate (as of Aug 31, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| SAP SE SAP | €191.32 | €169.59 | −11% |
| Shopify Inc SHOP | C$209.78 | C$28.76 | −86% |
| Uber Technologies, Inc UBER | $78.82 | $43.66 | −45% |
| Salesforce, Inc CRM | $252.05 | $249.28 | −1% |
| ServiceNow, Inc NOW | $138.43 | $43.73 | −68% |
| Snowflake Inc SNOW | $329.11 | $42.27 | −87% |
| Adobe Inc ADBE | $289.15 | $454.04 | +57% |
| Automatic Data Processing, Inc ADP | $284.68 | $177.51 | −38% |
| Intuit Inc INTU | $348.00 | $363.46 | +4% |
| Autodesk, Inc ADSK | $260.66 | $149.05 | −43% |
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