Market Cap: 101.5637B; Large Cap
P/E Ratio: 85.44; Fwd: 46.51
EPS (TTM): $4.31
Div. Yield: N/A

CD

CDNSNASDAQ— Cadence Design Systems Inc Price & Analysis

Cadence Design Systems Inc

TECHNOLOGY — SOFTWARE - APPLICATION

$377.27

+$9.04+2.45%

Market Cap: 101.5637B; Large Cap
P/E Ratio: 85.44; Fwd: 46.51
EPS (TTM): $4.31
Div. Yield: N/A

Technical Summary

RSI (14)50.12Neutral

SMA (50)$362.81Bullish

SMA (200)$326.90Bullish

MACD3.6614Bearish

Bollinger$362.13 – $416.44Mid

Stochastic16.96Oversold

Theo Outlook

Cadence Design Systems (CDNS) presents a bullish thesis supported by its $104.1B market capitalization, trailing P/E of 87.74, forward P/E of 46.51, TTM EPS of $4.30, and robust 18.7% quarterly revenue growth alongside 23% EPS growth. The company's premium valuation reflects strong positioning in electronic design automation (EDA) software amid surging demand for advanced semiconductors and AI chips. Investors are rewarded with high margins, including a 21.2% profit margin and 29.7% operating margin TTM.

Key catalysts include continued momentum in computational software for SoC and PCB design, expansion into AI-driven silicon solutions, and sustained earnings beats driven by semiconductor industry tailwinds. Recent quarterly results show accelerating adoption of Cadence's tools in high-performance computing and automotive electronics, with analyst consensus targeting $388.78 per share and a strong buy rating from 5 firms versus only 3 holds.

Risks center on elevated valuation leaving little room for disappointment, intense competition from Synopsys, and potential macro headwinds in the semiconductor cycle that could slow customer capex. Mitigation comes from Cadence's sticky software ecosystem, 91% institutional ownership providing stability, and diversification across end markets; the 1.15 beta indicates moderate sensitivity to broader tech volatility. Analysis generated by HeyTheo AI based on SEC filings, earnings transcripts, and market data.

Theo Outlook

Cadence Design Systems (CDNS) presents a bullish thesis supported by its $104.1B market capitalization, trailing P/E of 87.74, forward P/E of 46.51, TTM EPS of $4.30, and robust 18.7% quarterly revenue growth alongside 23% EPS growth. The company's premium valuation reflects strong positioning in electronic design automation (EDA) software amid surging demand for advanced semiconductors and AI chips. Investors are rewarded with high margins, including a 21.2% profit margin and 29.7% operating margin TTM.

Key catalysts include continued momentum in computational software for SoC and PCB design, expansion into AI-driven silicon solutions, and sustained earnings beats driven by semiconductor industry tailwinds. Recent quarterly results show accelerating adoption of Cadence's tools in high-performance computing and automotive electronics, with analyst consensus targeting $388.78 per share and a strong buy rating from 5 firms versus only 3 holds.

Risks center on elevated valuation leaving little room for disappointment, intense competition from Synopsys, and potential macro headwinds in the semiconductor cycle that could slow customer capex. Mitigation comes from Cadence's sticky software ecosystem, 91% institutional ownership providing stability, and diversification across end markets; the 1.15 beta indicates moderate sensitivity to broader tech volatility. Analysis generated by HeyTheo AI based on SEC filings, earnings transcripts, and market data.

Company Overview

Cadence Design Systems, Inc., headquartered in San Jose, California, is an American multinational computational software company. The company produces software, hardware and silicon structures for designing integrated circuits, systems on chips (SoCs) and printed circuit boards.

Fundamental Snapshot

Revenue: 5.5286B
EBITDA: 2.0142B
Gross Profit: 4.759B
Operating Margin: 29.7%
Profit Margin: 21.2%
ROE: 20.7%
Book Value: $23.79
Beta: 1.149
52-Wk High: $416.69
52-Wk Low: $262.75
Avg Volume: 3.8632M
PEG Ratio: 3.496

Frequently Asked Questions

What is Cadence Design Systems' business model?

Cadence Design Systems operates a software-centric business model focused on computational tools for designing integrated circuits, systems-on-chips, and printed circuit boards. It generates revenue primarily through perpetual and subscription licenses for its EDA software suite, supplemented by hardware and services. With TTM revenue of $5.53B and no dividend (yield 0%), the model emphasizes high-margin recurring revenue from a global customer base in semiconductors and electronics.

What are CDNS's main revenue sources?

The majority of CDNS revenue comes from software licenses and maintenance for its electronic design automation platforms, accounting for the bulk of its $5.53B TTM top line. Additional sources include hardware emulation systems and silicon IP. Quarterly revenue grew 18.7% YoY in the latest period ending March 2026, reflecting strong software adoption across AI and automotive sectors.

Trading Data

Open: $362.25
Previous Close: $368.23
Day Range: $358.76 – $381.9
Volume: 3.9038M
Shares Outstanding: 275.816M
Analyst Target: $388.78

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Company Overview

Cadence Design Systems, Inc., headquartered in San Jose, California, is an American multinational computational software company. The company produces software, hardware and silicon structures for designing integrated circuits, systems on chips (SoCs) and printed circuit boards.

Fundamental Snapshot

Revenue: 5.5286B
EBITDA: 2.0142B
Gross Profit: 4.759B
Operating Margin: 29.7%
Profit Margin: 21.2%
ROE: 20.7%
Book Value: $23.79
Beta: 1.149
52-Wk High: $416.69
52-Wk Low: $262.75
Avg Volume: 3.8632M
PEG Ratio: 3.496

Frequently Asked Questions

What is Cadence Design Systems' business model?

Cadence Design Systems operates a software-centric business model focused on computational tools for designing integrated circuits, systems-on-chips, and printed circuit boards. It generates revenue primarily through perpetual and subscription licenses for its EDA software suite, supplemented by hardware and services. With TTM revenue of $5.53B and no dividend (yield 0%), the model emphasizes high-margin recurring revenue from a global customer base in semiconductors and electronics.

What are CDNS's main revenue sources?

The majority of CDNS revenue comes from software licenses and maintenance for its electronic design automation platforms, accounting for the bulk of its $5.53B TTM top line. Additional sources include hardware emulation systems and silicon IP. Quarterly revenue grew 18.7% YoY in the latest period ending March 2026, reflecting strong software adoption across AI and automotive sectors.

What competitive advantages does CDNS have?

CDNS benefits from deep technological moats in EDA software, a comprehensive product portfolio, and long-term customer relationships that create high switching costs. Its 29.7% operating margin and 10.4% ROA underscore efficiency, while 91% institutional ownership signals confidence. The company holds a leading position alongside peers, supported by continuous innovation in AI-accelerated design tools.

What are the key risks for CDNS investors?

Primary risks include a high trailing P/E of 87.74 that amplifies downside from any earnings miss, competition in the EDA market, and cyclical exposure to semiconductor spending. Macroeconomic slowdowns or delayed chip projects could pressure growth. Mitigants include diversified end markets, a beta of 1.15, and a forward P/E of 46.51 that already prices in some caution; the next earnings date follows the March 2026 quarter.

What is the growth outlook for CDNS?

CDNS shows strong growth potential with 23% YoY EPS growth and 18.7% revenue growth in the latest quarter, fueled by AI and advanced node design demand. Analysts project continued expansion with a $388.78 target price and 5 strong buy ratings. Long-term drivers include semiconductor proliferation, though the $104.1B market cap and 87.74 P/E require sustained execution to justify.

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