Cadence Design Systems, Inc (CDNS) Fair Value & Analysis
Technology · US · Market cap $106B
Cadence Design Systems, Inc
CDNS · US
Fair value as of: Jul 12, 2026
From 26 valuation models · updated 26 days ago
Share price −8.8% over the past month.
A solid business, but screening 76% overvalued on our models.
What matters now
- The price sits above even our optimistic bull case ($100.51). The favourable scenario is already priced in.
- Solid but not exceptional quality (65/100) and above fair value, neither a clear bargain nor a standout compounder.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Jul 12, 2026.
How to read this chart
60‑month range $121.14 – $416.39 · fair‑value band $60.31 – $100.51 · the $338.42 price screens above the $80.41 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Jul 12, 2026.
Analysis
Cadence Design Systems, Inc (CDNS) currently trades at $338.42, while our model-based Fair Value estimate is $80.41, implying the stock looks roughly 76.2% overvalued today. We read business quality at 65/100 (solid quality), in the Technology sector. Bear case: priced above our estimate, the market already discounts strong expectations. Bull case: above-average quality can justify a premium, the entry price still matters most (evidence: 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 Jul 12, 2026
Our scenario range runs from $60.31 (bear case) to $100.51 (bull case); at $338.42, 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 19% below its 52-week high and 29% above its 52-week low, currently above its 200-day average. For context, the median of 10 Technology peers we cover trades at -27% fair-value upside, at -76%, CDNS screens richer than that median.
Fair Value models
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted 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.
All 26 models by family
Widest divergence: DCF Models ($103.47) versus Asset-Based ($13.30). Highest evidence: Growth DCF (80).
Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Jul 12, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 73 · Market factors (momentum, volatility) 45
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.
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.
CDNS screens 76% overvalued. Compare with SAP SE →
Recent news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- 5 Revealing Analyst Questions From Cadence Design Systems’s Q2 Earnings Call
- Cadence Design Systems (CDNS): Agentic Capabilities Improve New Growth Engine
- Cadence Design Systems, Inc. (CDNS) is Attracting Investor Attention: Here is What You Should Know
- Cadence Q2 Earnings Top Estimates on AI Demand, Backlog Hits $8.1B
Peer Group
Software - Application · 709 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
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.
ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.
Similar stocks
10 more Software - Application stocks, each showing price versus our Fair Value estimate (as of Jul 12, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| SAP SE SAPS | C$12.69 | C$16.26 | +28% |
| Shopify Inc SHOP | C$173.23 | C$20.54 | -88% |
| Uber Technologies, Inc UBER | $72.67 | $51.11 | -30% |
| Salesforce, Inc CRM | $170.77 | $182.10 | +7% |
| ServiceNow, Inc NOW | $107.71 | $33.12 | -69% |
| Snowflake Inc SNOW | $271.87 | $34.04 | -87% |
| Adobe Inc ADBE | $230.61 | $379.48 | +65% |
| Automatic Data Processing, Inc ADP | $241.92 | $177.51 | -27% |
| Intuit Inc INTU | $291.09 | $258.69 | -11% |
| Beijing Kingsoft Office Software, Inc 688111 | ¥223.50 | ¥67.52 | -70% |
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How we calculate Fair Value
Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.
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