CADENCE DESIGN SYSTEMS INC (CDNS) Factsheet
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CADENCE DESIGN SYSTEMS INC (CDNS) Stock Analysis
Analysis from 10-Q filed 2026-10-28. Data as of Q3 2026.
Overall Grade: F (Concerning)
Grade F (Concerning). ROIC 16.0%. FCF margin 28.8%. D/E 0.4x. Source: 10-Q filed 2026-10-28.
| Metric | Value | Context |
|---|---|---|
| ROIC | 16.0% | Solid returns |
| FCF Margin | 28.8% | Strong cash generation |
| Debt/Equity | 0.4x | Conservative leverage |
ROIC 16.0% — Top 25% of sector peers. FCF margin 28.8% — Top 25%.
Explore CADENCE DESIGN SYSTEMS INC: Earnings History | Overview
Programmatic access: Available via MCP at mcp.metricduck.com. Tools for CDNS: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_section, get_metric_history, compare_companies, screen_filing_signals.
Profitability: CADENCE DESIGN SYSTEMS INC earns 16.0% ROIC, Top 25% in Technology
ROIC TTM 16.0%, sector median 4.4%, Top 25%. DuPont: NOPAT margin 21.7% × asset turnover 0.5x. Gross margin 85.7%. Operating margin 28.9%. Source: 10-Q filed 2026-10-28.
| Metric | CDNS | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 16.0% | Good | Above sector median of 4.4% |
| Return on Equity (ROE) | 22.2% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 85.7% | Excellent | Strong pricing power |
| Operating Margin | 28.9% | Excellent | Efficient operations |
Cash Flow: CADENCE DESIGN SYSTEMS INC generates $1.8B FCF at 28.8% margin, positive NaN/8 quarters
FCF TTM $1.8B. FCF margin 28.8%, Top 25%. OCF/Net income 1.4x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2026-10-28.
| Metric | CDNS | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 28.8% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $1.8B | Good | Positive cash generation |
| OCF/Net Income | 1.4x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: CADENCE DESIGN SYSTEMS INC at 0.4x leverage, 14.0x interest coverage
Debt/Equity 0.4x. Total debt $2.6B, cash & investments $1.5B. Interest coverage 14.0x. Source: 10-Q filed 2026-10-28.
| Metric | CDNS | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.4x | Good | Conservative capital structure |
| Net Cash Position | $-1.2B | Warning | Net debt position |
| Interest Coverage | 14.0x | Excellent | Comfortable debt service |
Valuation: CADENCE DESIGN SYSTEMS INC trades at 66.2x earnings
P/E 66.2x. EV/Sales 15.1x. FCF yield 1.9%. Source: 10-Q filed 2026-10-28.
| Metric | CDNS | Rating | Context |
|---|---|---|---|
| P/E Ratio | 66.2x | Warning | Premium valuation |
| EV/Sales | 15.1x | Warning | Growth premium priced in |
| FCF Yield | 1.9% | Warning | Lower cash yield |
Capital Allocation: CADENCE DESIGN SYSTEMS INC returns 1.1% shareholder yield
Total shareholder yield 1.1% (buyback 1.1%). Share count +0.8% YoY. Capital returned $1.0B TTM. Source: 10-Q filed 2026-10-28.
| Metric | CDNS | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.1% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 1.1% | Adequate | Minimal buyback activity |
| Share Count Change (YoY) | 0.8% | Adequate | Net dilution from issuance/SBC |
| Total Capital Returned (TTM) | $1.0B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 16.0% | Top 25% | 3.6x above |
| Free Cash Flow Margin | 28.8% | Top 25% | 2.8x above |
| Gross Margin | 85.7% | Top 25% | 1.7x above |
| Operating Margin | 28.9% | Top 10% | 6.1x above |
| Return on Equity (ROE) | 22.2% | Top 50% | 3.5x above |
| P/E Ratio | 66.2x | N/A | - |
Financial Scorecard
| Metric | CDNS | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 16.0% | Good | Top 25% of sector (median: 4.4%) |
| Free Cash Flow Margin | 28.8% | Excellent | Top 25% of sector (median: 10.3%) |
| Gross Margin | 85.7% | Excellent | Top 25% of sector (median: 51.0%) |
| Debt to Equity Ratio | 38.3% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 66.2x | Warning | High expectations priced in |
| Free Cash Flow Yield | 1.9% | Warning | Growth-focused valuation |
Frequently Asked Questions
Q: What is CADENCE DESIGN SYSTEMS INC's Return on Invested Capital (ROIC)?
CADENCE DESIGN SYSTEMS INC (CDNS) has a trailing twelve-month Return on Invested Capital (ROIC) of 16.0%. The 8-quarter median ROIC is 17.2% with a declining trend. Sector median 4.4%. Source: 10-Q filed 2026-10-28.
Q: What is CADENCE DESIGN SYSTEMS INC's Free Cash Flow Margin?
CADENCE DESIGN SYSTEMS INC (CDNS) has a free cash flow margin of 28.8%, generating $1.8 billion in free cash flow over the trailing twelve months. Source: 10-Q filed 2026-10-28.
Q: What is CADENCE DESIGN SYSTEMS INC's P/E ratio and how does it compare to peers?
CADENCE DESIGN SYSTEMS INC (CDNS) trades at a P/E ratio of 66.2x, which is above the sector median of N/A. EV/Sales 15.1x. FCF yield 1.9%. Source: 10-Q filed 2026-10-28.
Q: What is CADENCE DESIGN SYSTEMS INC's revenue and earnings growth?
CADENCE DESIGN SYSTEMS INC (CDNS) grew revenue by 17.6% year-over-year. EPS +29.7% YoY. Source: 10-Q filed 2026-10-28.
Q: Is CADENCE DESIGN SYSTEMS INC buying back stock?
CADENCE DESIGN SYSTEMS INC (CDNS) repurchased $1.0 billion of stock over the trailing twelve months. This represents a buyback yield of 1.1%. Share count +0.8% YoY. Source: 10-Q filed 2026-10-28.
Q: How does CADENCE DESIGN SYSTEMS INC compare to competitors in Technology?
Compared to other companies in Technology, CADENCE DESIGN SYSTEMS INC (CDNS) shows: ROIC 16.0%, sector median 4.4% (Top 25%). FCF margin 28.8%, sector median 10.3% (Top 25%). Gross margin 85.7%, 34.7pp above sector median. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with CADENCE DESIGN SYSTEMS INC?
Quantitative warning flags for CADENCE DESIGN SYSTEMS INC (CDNS): 1) ROIC declining -4.9% over 8 quarters. Source: 10-Q filed 2026-10-28.
Data Source: Data sourced from 10-Q filed 2026-10-28. TTM metrics as of Q3 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.
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