Cadence Design Systems (CDNS)

Information Technology · $92.3B market cap · SEC CIK 0000813672

Next reports on Feb 16, 2027, after the close, with analysts expecting $2.28 in earnings per share.

52-week range $262.75 to $416.69. 20% below its 52-week high and 26% above its low.

The case for CDNS

• Generated $1.6B of free cash flow in FY2025, 30% of revenue.
• 23% of revenue drops through to net profit.
• Revenue growing 17.6% year over year.
• Earnings per share up 29.8%.
• Has compounded revenue at 14.6% a year over five years.
• Return on equity of 21%.

The case against

• Expensive for its growth: 66.9× earnings, where 15% a year of growth would justify about 31×.
• Priced at 15.1× sales, which leaves no room for a stumble.
• The price trend is weak (42/100): −1.4% over a year, −5.7% over three months, 20% below its 52-week high.

What the score is made of

Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.

• Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.

The financials

The financials, five years deep

Pulled from Cadence Design Systems's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.

What Cadence Design Systems says it does

This Annual Report and the documents incorporated by reference in this Annual Report contain statements that are not historical in nature, are predictive, or that depend upon or refer to future events or conditions or contain other forward-looking statements. Statements including, but not limited to, statements regarding artificial intelligence (“AI"), other technological and market advancements and their impacts on our business; the extent, timing and mix of future revenues and customer demand; the deployment of our products and services; the impact of the macroeconomic and geopolitical environment, including but not limited to, expanded trade controls, tariffs, conflicts around the world, volatility in foreign currency exchange rates, inflation and changes in interest rates; the impact of government actions; future costs, expenses, tax rates and uses of cash; pending legal, administrative and tax proceedings; restructuring actions…

Risk factors CDNS lists in its 10-K

• We have experienced varied operating results, and our operating results for any particular fiscal period are affected by the timing of revenue recognition, particularly for our hardware, IP and certain software products
• The growth of our business depends primarily on the semiconductor and electronics systems industries
• Uncertainty in the global economy and instability within international relations, including changes in governmental policies relating to technology, may negatively affect our business and reduce our bookings levels and revenue
• We are subject to governmental export and import controls that subject us to liability and impair our ability to compete in global markets as well as a variety of other laws and regulations
• We could suffer serious harm to our business because of the infringement or misappropriation of our IP rights by third parties
• We may not realize opportunities presented by AI and may incur reputational and financial harm and liability as a result of issues in the development and use of AI
• Doing business with the public sector and heavily-regulated entities subjects us to risks related to government procurement processes, regulations and contracting requirements
• Risks associated with our international operations could adversely impact our financial condition
• The effect of foreign exchange rate fluctuations may adversely impact our revenue, expenses, cash flows and financial condition
• We depend upon our management team and qualified employees, and our failure to attract, train, motivate and retain them may make us less competitive and therefore harm our results of operations
• The investment of our cash is subject to risks that may cause losses and affect the liquidity of these investments
• The long sales cycle of our products and services may cause our operating results to fluctuate unexpectedly
• We have incurred, and may in the future incur, substantial costs in connection with restructuring plans, which might not result in the benefits we anticipate, possibly having a negative effect on our future operating results
• Our business is subject to the risk of natural disasters, global climate change and other catastrophic events
• Customer consolidation could affect our operating results
• Our investment in research and development of new and existing products, technologies and services may affect our operating results, and our return on investment may be lower or develop more slowly than expected
• Our operating results and revenue could be adversely affected by customer payment delays, customer bankruptcies and defaults, modifications or non-renewals of licenses
• The competition in our industries is substantial, and we may not be able to continue to compete successfully
• Our future revenue is dependent in part upon our installed customer base continuing to license or buy products and purchase services
• We depend on a single supplier or a limited number of suppliers for certain hardware components and contract manufacturers for production of our hardware products, making us vulnerable to supply disruption and price fluctuation
• Litigation, government investigations or regulatory proceedings could adversely affect our financial condition and operations
• Errors, defects or other issues with our products and services could expose us to liability and harm our business
• If we become subject to unfair hiring claims, we could be prevented from hiring needed employees, incur liability for damages and incur substantial costs in defending ourselves
• We are subject to evolving corporate governance, environmental and social practices and public disclosure expectations and regulations that impact compliance costs and risks of noncompliance
• Our stock price has been and may continue to be subject to fluctuations
• Our certificate of incorporation and bylaws and certain provisions under Delaware law could prevent an acquisition of our company or limit the price that investors might be willing to pay for our common stock
• Our bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain disputes between us and our stockholders
• Our debt obligations expose us to risks that could adversely affect our business, financial condition and results of operations, and could prevent us from fulfilling our obligations under such indebtedness
• At the option of the holders of our outstanding notes, we may, under certain circumstances, be required to repurchase such notes
• The terms of our debt agreements restrict our current and future operations, particularly our ability to respond to changes or to take certain actions
• We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
• Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
• Various factors could increase our future borrowing costs or reduce our access to capital, including a lowering or withdrawal of the ratings assigned to us and our Senior Notes by credit rating agencies

Filings

Other Information Technology companies