CDNS
Cadence Design Systems · Information Technology · Application Software
$315.92
52w 262.75 – 416.69
20y monthly, adjusted
Mkt cap
$87.1B
P/E
79.4
P/FCF
55.4
FCF yield
1.8%
ROE
20.3%
Shldr yield
1.1%
div 0.0% + bb 1.1%
What today's price assumes
At $87.1B, the market is pricing in 21.6% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew 19.1% per year — the price asks for acceleration beyond the historical record.
Simple DCF per-share range: $88 · $197 · $283 (4% / base / optimistic growth). An estimate, not a target.
Historical multiple lens
At its own median P/OCF of 26.7× across 15 years, CDNS would trade near $167/share (25th–75th percentile: $96–$274); it trades at 50.4× today.
Assumes the historical multiple regime persists — re-ratings can be permanent.
Growth record
Compound annual growth rates from as-filed 10-K data, split-adjusted
Rev 3y
+14.1%
Rev 5y
+14.6%
Rev 10y
+12.9%
EPS 5y
+2.4%
EPS 10y
+22.8%
FCF 5y
+15.9%
FCF 10y
+19.1%
Fundamentals
Fiscal 2009–2025, from SEC filings
Revenue
Net income
Free cash flow
Diluted shares (lower is better)
Margins
Capital returned (dividends + buybacks)
Cash vs long-term debt
Quarterly
Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.
Revenue by quarter
Net income by quarter
| Quarter | Revenue | YoY | Net income | YoY | EPS | OCF |
|---|---|---|---|---|---|---|
| Q1'26 | $1.5B | +18.7% | $335.7M | +22.7% | 1.23 | $355.8M |
| Q4'25 * | $1.4B | +6.2% | $388.1M | +14.1% | 1.42 | $553.5M |
| Q3'25 | $1.3B | +10.1% | $287.1M | +20.6% | 1.05 | $310.7M |
| Q2'25 | $1.3B | +20.2% | $160.1M | −30.3% | 0.59 | $377.6M |
| Q1'25 | $1.2B | +23.1% | $273.6M | +10.5% | 1.00 | $487.0M |
| Q4'24 * | $1.4B | +26.9% | $340.2M | +5.0% | 1.23 | $441.4M |
| Q3'24 | $1.2B | +18.8% | $238.1M | −6.4% | 0.87 | $410.0M |
| Q2'24 | $1.1B | +8.6% | $229.5M | +3.8% | 0.84 | $156.0M |
| Q1'24 | $1.0B | −1.2% | $247.6M | +2.4% | 0.91 | $253.2M |
| Q4'23 * | $1.1B | +18.8% | $323.9M | +34.7% | 1.19 | $272.1M |
| Q3'23 | $1.0B | +13.4% | $254.3M | +36.5% | 0.93 | $395.9M |
| Q2'23 | $976.6M | +13.9% | $221.1M | +18.3% | 0.81 | $413.8M |
| Q1'23 | $1.0B | +13.3% | $241.8M | +2.7% | 0.89 | $267.4M |
Track record
Compound annual growth by period. For debt and share count, negative is the good direction.
| Series | 3y | 5y | 10y | 15y |
|---|---|---|---|---|
| Revenue | +14.1% | +14.6% | +12.9% | +12.9% |
| Operating cash flow | +11.7% | +15.5% | +18.5% | +32.4% |
| Free cash flow | +12.4% | +15.9% | +19.1% | — |
| EPS (diluted) | +9.5% | +2.4% | +22.8% | — |
| Equity | +25.9% | +17.3% | +15.2% | +29.9% |
| LT debt | — | — | — | — |
| Diluted shares | −0.2% | −0.4% | −1.1% | +0.4% |
| Stock price | +9.5% | +14.1% | +28.6% | +26.5% |
$100, 3 years ago
$131vs $176 in SPY
9.5% vs 20.7%/yr
$100, 5 years ago
$193vs $181 in SPY
14.1% vs 12.6%/yr
$100, 10 years ago
$1,242vs $412 in SPY
28.6% vs 15.2%/yr
$100, 15 years ago
$3,419vs $813 in SPY
26.5% vs 15.0%/yr
The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)
Last 5 years
$13.08
$60.8B created / $4.6B retained
Last 10 years
$11.82
$75.5B created / $6.4B retained
Quality & capital discipline
Cash-based returns and how management deploys capital
Cash ROIC
31.6%
OCF ÷ (equity + debt)
OCF / EV yield
2.0%
MC vs 10× OCF
5.09
≤1 = priced under 10× OCF
Debt / FCF
—
SBC / FCF
28.7%
Owner earnings
$1.1B
OCF − capex − SBC
OE yield
1.3%
Share count 5y
+0.5%
per year; negative = buybacks
Capital intensity
9.8%
net PP&E ÷ revenue
Sales efficiency
$0.08
new PP&E per $1 new revenue, 5y
Growth engine (6y): reinvested 16.6% of operating cash flow at an incremental return of 92.9% — an organically fundable growth rate of about 15.4% per year (growth ≈ reinvestment rate × incremental ROIC).
Checklist
20 of 26 checks pass · 77%. Checks with structurally missing inputs are excluded.
Growth & Consistency
6/7
- pass
Revenue growth
14.6% · 5y CAGR ≥ 5%
- fail
EPS growth
2.4% · 5y CAGR ≥ 5%
- pass
FCF growth
15.9% · 5y CAGR ≥ 5%
- pass
Revenue rises consistently
9 of 9 · up in ≥ 7 of last 10 years
- pass
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
- pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
- pass
Cash flow keeps up with sales
15.5% vs 14.6% · OCF CAGR ≥ 0.9× revenue CAGR
Profitability
6/6
- pass
Net margin
20.9% · ≥ 8%
- pass
Operating margin
28.2% · ≥ 10%
- na
Gross margin stable or rising
— · no drop > 2 pts over 3y
- pass
Return on equity
20.3% · ≥ 12%
- pass
Cash ROIC
31.6% · ≥ 12%
- pass
FCF margin
30.0% · ≥ 5%
- pass
Earnings back their cash
OCF $1.7B vs NI $1.1B · OCF ≥ net income (latest FY)
Balance Sheet
5/5
- pass
Debt payable from cash flow
no debt · LT debt ≤ 3× FCF
- pass
Cash cushion
— · cash ≥ 50% of LT debt
- pass
Leverage
— · LT debt ≤ 1.5× equity
- pass
Equity positive and compounding
$5.5B · equity > 0 and grew over ~5y
- pass
Interest burden
8% · interest ≤ 15% of operating income
Capital Allocation
3/4
- pass
Share count flat or shrinking
0.5% · ≤ +0.5%/yr over ~5y
- fail
Stock comp restrained
29% · SBC ≤ 15% of FCF
- pass
Distributions funded by FCF
58% · dividends + buybacks ≤ 100% of FCF
- pass
Repurchases are a habit
10 of 10 · buybacks in ≥ 5 of last 10 years
Valuation Discipline
0/4
- fail
FCF yield
1.8% · ≥ 3%
- fail
Earnings multiple
79.4 · P/E ≤ 25
- fail
Price asks less than history delivered
21.6% vs 19.1% · implied FCF growth ≤ historical FCF CAGR
- fail
Shareholder yield
1.1% · dividends + buybacks ≥ 2% of market cap
Financial data
As filed in 10-Ks; per-share figures split-adjusted. $ in millions.
| FY | Revenue | Gross profit | Op income | Net income | EPS | OCF | CapEx | FCF | Dividends | Buybacks | SBC | Cash | LT debt | Equity | Shares |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 5,297 | — | 1,492 | 1,109 | 4.06 | 1,729 | 142 | 1,587 | — | 925 | 455 | 3,001 | — | 5,474 | 273 |
| 2024 | 4,641 | — | 1,351 | 1,055 | 3.85 | 1,261 | 143 | 1,118 | — | 550 | 391 | 2,644 | — | 4,674 | 274 |
| 2023 | 4,090 | — | 1,251 | 1,041 | 3.82 | 1,349 | 102 | 1,247 | — | 700 | 326 | 1,008 | — | 3,404 | 273 |
| 2022 | 3,562 | — | 1,074 | 849 | 3.09 | 1,242 | 123 | 1,119 | — | 1,050 | 270 | 882 | — | 2,745 | 275 |
| 2021 | 2,683 | — | 646 | 591 | 2.11 | 905 | 95 | 810 | — | 380 | 197 | 928 | — | 2,493 | 280 |
| 2019 | 2,336 | — | 492 | 989 | 3.53 | 730 | 75 | 655 | — | 306 | 182 | 705 | — | 2,103 | 281 |
| 2018 | 2,138 | — | 396 | 346 | 1.23 | 605 | 62 | 543 | — | 250 | 168 | 533 | — | 1,288 | 281 |
| 2017 | 1,943 | — | 324 | 204 | 0.73 | 471 | 58 | 413 | — | 100 | 130 | 688 | — | 989 | 280 |
| 2016 | 1,816 | — | 245 | 203 | 0.70 | 445 | 54 | 391 | — | 960 | 109 | 465 | — | 742 | 291 |
| 2015 | 1,581 | — | 207 | 159 | 0.52 | 317 | 40 | 277 | — | 100 | 84 | 932 | — | 1,334 | 307 |
| 2013 | 1,460 | — | 189 | 164 | 0.56 | 368 | 45 | 323 | — | 0 | 66 | 536 | — | 1,156 | 295 |
| 2012 | 1,326 | — | 212 | 440 | 1.57 | 316 | 36 | 280 | — | 0 | 48 | 726 | — | 915 | 281 |
| 2011 | 1,150 | — | 120 | 72 | 0.27 | 240 | 31 | 209 | — | 0 | 44 | 602 | — | 411 | 271 |
| 2010 | 853 | — | -124 | -150 | -0.58 | 26 | 41 | -16 | — | — | 55 | 569 | — | 108 | 258 |
| 2009 | 1,039 | — | -1,573 | -1,857 | -7.30 | 70 | 97 | -27 | — | 274 | 81 | 568 | — | 187 | 254 |
Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.