Cadence Design Systems, Inc. (CDNS) AI Stock Analysis

Cadence Design Systems, Inc. is a global provider of solutions for integrated circuit (IC) design, offering software, hardware, and services for the semiconductor industry. The company specializes in functional verification through platforms such as JasperGold, Xcelium, Palladium, and Protium to test designs before manufacturing. It also delivers digital IC design and sign-off tools including Genus and Joules, alongside physical implementation solutions for place and route and multiple patterning preparation. Additionally, Cadence offers custom IC design, system design for printed circuit boards, pre-verified intellectual property functional blocks, and comprehensive design support services.

Cadence grew annual revenue from $2.99B in FY2021 to $5.30B in FY2025, representing a 5-year revenue CAGR of 14.6%. Annual net income increased from $696.0M in FY2021 to $1.11B in FY2025, with diluted EPS rising from $3.31 to $7.14 over the same period. Operating margin improved from 26.1% in FY2021 to 31.1% in FY2025, while gross margin stood at 86.4% in FY2025. In the trailing twelve months ending June 30, 2026, revenue reached $5.84B with a profit margin of 23.6%. For the latest quarter ended June 30, 2026, quarterly revenue growth was 24.2% year-over-year, while quarterly earnings grew 125.4%.

As of June 30, 2026, Cadence held $1.44B in cash and short-term investments against $2.48B in total debt, resulting in net debt of $1.04B. The company maintained shareholders' equity of $6.86B, a current ratio of 1.74, and a debt-to-equity ratio of 0.36. In FY2025, operating cash flow reached $1.73B and free cash flow was $1.59B. Capital allocation during FY2025 included $141.9M directed toward capital expenditures and $925.0M allocated to share buybacks, contributing to a 5-year share count change of -0.8%.

Cadence carries a market capitalization of $88.13B and an enterprise value of $86.33B. The stock trades at a trailing P/E of 63.5x and a forward P/E of 31.5x, both above the median of its Nasdaq-100 Technology peers of 42.1x and 25.1x, respectively. Its price-to-sales multiple is 15.1x versus the peer median of 11.9x, and its EV/EBITDA of 37.2x exceeds the peer median of 30.6x. Over the past year, the stock returned -1.5% compared to 16.8% for the S&P 500 (SPY), while its 5-year return of 105.1% outperformed the SPY 5-year return of 83.0%.

Wall Street coverage consists of 18 Strong Buy, 5 Buy, and 2 Hold ratings, with zero Sell or Strong Sell recommendations. The mean price target of $406.24 represents a 27.1% premium over the last close of $319.51. For the current fiscal year ending December 31, 2026, analysts estimate revenue of $6.32B and EPS of $4.81. Cadence beat EPS expectations in 3 of the last 4 quarters, and its next earnings date is scheduled for October 26, 2026.

This page is an AI-written research summary of Cadence Design Systems, Inc. (CDNS). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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