Cadence Design Systems, Inc. (CDNS) Stock Analysis — Fair Value, Risk & Moat Rating
NMS · Technology · Software - Application
Is Cadence Design Systems, Inc. a safe investment right now?
Cadence Design Systems, Inc.'s Altman Z-Score of 14.13 places it in the safe zone. Our fair value estimate is $174.00 (Overvalued). Moat rating: 3.1/5 stars.
Could Cadence Design Systems, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 14.13 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives CDNS's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.2989 | 1.2 | 0.36 |
| B · Retained Earnings / Total Assets | RE / TA | 0.6994 | 1.4 | 0.98 |
| C · EBIT / Total Assets | EBIT / TA | 0.1614 | 3.3 | 0.53 |
| D · Market Cap / Total Liabilities | MCap / TL | 19.5673 | 0.6 | 11.74 |
| E · Revenue / Total Assets | Rev / TA | 0.5217 | 1.0 | 0.52 |
How has CDNS's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 25.49 | Safe |
| 2023 | 27.04 | Safe |
| 2024 | 15.12 | Safe |
| 2025 | 14.13 | Safe |
Source: Calculated from CDNS's latest 10-K filing on SEC EDGAR.
What is Cadence Design Systems, Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $4.35 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $4.06 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $4.78 | 27 analysts consensus |
| Trailing P/E | 81.9x | Current market pricing |
| Fair P/E (β discount) | 40.0x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Growing | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $371.53 (27 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Cadence Design Systems, Inc. have a durable competitive advantage?
Moat rating: 3.1/5.
What makes up CDNS's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 4/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 2/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is CDNS's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | 30.6% | — |
| 2023 | 32.5% | Rising |
| 2024 | 20.6% | Declining |
| 2025 | 20.6% | Stable |
Source: ROIC calculated from SEC EDGAR filings.
Is Cadence Design Systems, Inc.'s dividend safe?
Cadence Design Systems, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $5.3B | $4.6B | $3.6B | Rising |
| Net Income | $1.1B | $1.1B | $0.8B | Rising |
| Free Cash Flow | $1.6B | $1.1B | $1.1B | Rising |
| Gross Margin | 86.4% | 86.1% | 89.6% | Stable |
Recent events that affect our CDNS analysis
CDNS earnings report scheduled
Upcoming report. Consensus EPS estimate: $1.89. Revenue estimate: $1.46B. Our current Fair Value: $174.00 — a significant beat or miss could shift this estimate.
CDNS analyst consensus: 88% bullish (23 of 26 analysts)
5 Strong Buy, 18 Buy, 3 Hold, 0 Sell, 0 Strong Sell. Consensus target: $371.53 (12.0% upside). Compare with our independent Fair Value: $174.00.
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
CDNS beat EPS estimates by 4.1%
Reported EPS: $1.99 vs estimate $1.91. Earnings strength supports our Fair Value of $174.00 (47.5% below current price).
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
CDNS beat EPS estimates by 7.8%
Reported EPS: $1.93 vs estimate $1.79. Earnings strength supports our Fair Value of $174.00 (47.5% below current price).
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
CDNS beat EPS estimates by 6.0%
Reported EPS: $1.65 vs estimate $1.56. Earnings strength supports our Fair Value of $174.00 (47.5% below current price).
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
CDNS beat EPS estimates by 4.8%
Reported EPS: $1.57 vs estimate $1.50. Earnings strength supports our Fair Value of $174.00 (47.5% below current price).
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
CDNS filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
CDNS beat EPS estimates by 3.2%
Reported EPS: $1.88 vs estimate $1.82. Earnings strength supports our Fair Value of $174.00 (47.5% below current price).
CDNS filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about Cadence Design Systems, Inc.
What is Cadence Design Systems, Inc. stock price today?
Cadence Design Systems, Inc. (CDNS) stock price is $331.61 as of the latest market close, traded on the NASDAQ exchange.
What does Cadence Design Systems, Inc. do?
Cadence Design Systems, Inc. develops computational, AI-driven software, hardware, and silicon intellectual property products and solutions. It 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.
What is Cadence Design Systems, Inc. market cap?
Cadence Design Systems, Inc. has a market capitalization of $91.55B, classifying it as a large-cap stock in the Technology sector.
What sector and industry is CDNS in?
Cadence Design Systems, Inc. operates in the Technology sector, specifically within the Software - Application industry. It trades on the NASDAQ under the ticker symbol CDNS.
Is CDNS stock overvalued or undervalued?
Based on our valuation model, Cadence Design Systems, Inc. trades 90.6% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $174.00
- Current Price: $331.61
- Valuation Zone: Overvalued
What is CDNS stock forecast and analyst target price?
Based on 27 Wall Street analysts, the consensus price target for Cadence Design Systems, Inc. is $371.53, implying upside of 12.0% from the current price.
- Analyst High Target: $410.00
- Analyst Low Target: $275.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is Cadence Design Systems, Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for Cadence Design Systems, Inc.:
- Revenue growth (current year est.): 15.8%
- EPS growth (current year est.): 17.7%
- Revenue growth (next year est.): 13.1%
- EPS growth (next year est.): 18.6%
What are Cadence Design Systems, Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $5.3B | Rising |
| Net Income | $1.1B | Rising |
| Free Cash Flow | $1.6B | Rising |
| Gross Margin | 86.4% | Stable |
What is CDNS's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 81.9x
- Forward P/E (next 12 months est.): 35.4x
- FairValueLabs Fair P/E: 40.0x
How volatile is CDNS stock?
Cadence Design Systems, Inc. has a beta of 1.04, meaning it is roughly in line with overall market volatility. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does Cadence Design Systems, Inc. have?
Cadence Design Systems, Inc.'s balance sheet shows:
- Total Cash: $3.16B
- Total Debt: $2.67B
- Net Cash Position: $489.2M
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is Cadence Design Systems, Inc.'s free cash flow?
Cadence Design Systems, Inc. generated $1.51B in trailing twelve-month free cash flow (from $1.73B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does Cadence Design Systems, Inc. pay a dividend?
Cadence Design Systems, Inc. does not currently pay a regular dividend to shareholders. The company may be reinvesting all profits back into growth, or it may have suspended its dividend.
Is Cadence Design Systems, Inc. at risk of going bankrupt?
Cadence Design Systems, Inc.'s Altman Z-Score is 14.13, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does Cadence Design Systems, Inc. have a durable competitive advantage?
Cadence Design Systems, Inc. scores 3.1/5 stars (Narrow moat) in our moat analysis:
- ROIC Stability: 4/5
- Gross Margin Trend: 2/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is CDNS's return on equity (ROE)?
Cadence Design Systems, Inc.'s return on equity is 21.9%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy CDNS stock?
CDNS shares can be purchased through any brokerage account that provides access to the NASDAQ. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol CDNS
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is CDNS a value stock or speculative?
FairValueLabs classifies Cadence Design Systems, Inc. as Value-Speculation. It has some value characteristics but carries elevated risk factors that make it speculative. Extra due diligence is recommended.
Who is the CEO of Cadence Design Systems, Inc.?
The current CEO of Cadence Design Systems, Inc. is Dr. Anirudh Devgan Ph.D..
What is CDNS's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $4.05
- Forward EPS (next 12 months est.): $9.38
- Analyst consensus EPS (this year): $4.78
- Analyst consensus EPS (next year): $9.38
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
CDNS analysis methodology: How we calculate fair value, Z-Scores, and moat ratings