CDNSNASDAQ— Cadence Design Systems Inc Price & Analysis

Cadence Design Systems Inc

TECHNOLOGY — SOFTWARE - APPLICATION

$292.70

-$12.18-4.00%

Market Cap: $83.96B; Large Cap
P/E Ratio: 60.98; Fwd: 32.26
EPS (TTM): $5.00
Div. Yield: N/A

Technical Summary

RSI (14)31.05Neutral

SMA (50)$341.64Bearish

SMA (200)$327.13Bearish

MACD-8.4270Bearish

Bollinger$296.43 – $348.09Lower

Stochastic6.80Oversold

Theo Outlook

Cadence Design Systems (CDNS) presents a bullish thesis with a trailing P/E of 58.19, market capitalization of $80.61 billion, TTM revenue of $5.84 billion, and EPS of $5.03. Quarterly revenue grew 24.2% year-over-year while earnings surged 125.4%, reflecting strong demand for its computational software in semiconductor design amid AI-driven chip complexity. The stock trades near its 52-week high of $416.69 with an analyst target of $403.12, supported by robust operating margins of 28.6% and return on equity of 23.2%.

Key catalysts include continued expansion in AI and advanced node design tools, with recent earnings momentum showing sustained double-digit revenue growth and new product adoption in system-on-chip and PCB design. Market expansion into automotive and hyperscale computing segments, combined with hardware-software integration offerings, positions CDNS for further share gains as semiconductor complexity rises. Forward P/E of 31.45 suggests analysts anticipate earnings acceleration through 2027.

Risks include intense competition from Synopsys and Siemens EDA, potential regulatory scrutiny on semiconductor IP exports, and macro headwinds from delayed chip capex in a high-interest-rate environment. Mitigations involve CDNS's entrenched customer relationships, high switching costs in EDA tools, and diversified revenue across foundries and fabless firms, with beta of 1.14 indicating moderate volatility that can be hedged via sector ETFs. Analysis generated by HeyTheo AI based on SEC filings, earnings transcripts, and market data.

Analysis generated by HeyTheo AI on Sep 7, 2026.

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: $5.84B
EBITDA: $2.16B
Gross Profit: $5.01B
Operating Margin: 28.6%
Profit Margin: 23.6%
ROE: 23.2%
Book Value: $24.90
Beta: 1.14
52-Wk High: $416.69
52-Wk Low: $262.75
Avg Volume: 4.21M
PEG Ratio: 2.36

Frequently Asked Questions

What is Cadence Design Systems' core business model?

CDNS develops and sells computational software, hardware, and IP for designing integrated circuits, SoCs, and PCBs. It operates a subscription-based model with high recurring revenue from EDA tools used by semiconductor companies worldwide.

Where does CDNS generate most of its revenue?

TTM revenue reached $5.84 billion, primarily from software licenses and maintenance in the technology sector. Key sources include EDA tools for advanced nodes, with 24.2% quarterly revenue growth driven by AI and automotive design demand.

What are CDNS's main competitive advantages?

Strong moat from high switching costs, deep integration with foundry processes, and leadership in AI-accelerated design tools. It holds 91.7% institutional ownership and a 23.2% ROE, reflecting superior technology and customer lock-in versus peers.

What are the key risks for CDNS investors?

Primary risks include competition from Synopsys, export controls on semiconductor tech, and cyclical chip spending. The stock's 58.19 trailing P/E and 1.14 beta amplify downside in macro slowdowns, though diversified end-markets provide some buffer.

What is the growth outlook for CDNS?

Analysts target $403.12 with forward P/E of 31.45, supported by 125.4% quarterly EPS growth and expansion in AI design. Long-term drivers include rising semiconductor complexity, with shares outstanding at 275.4 million and no dividend yield.