Cadence Design Systems, Inc. (Cadence) is a global market leader that develops computational, AI-driven software, accelerated hardware, and silicon intellectual property (‘IP’) products and solutions. The company’s customers include semiconductor com…
Analysis
Hope premium
Cadence Design Systems, Inc. is priced well ahead of what the underlying numbers justify, a pattern we describe as a hope premium. Worth noting: the cash the business generates has lagged behind what the income statement shows.
On valuation, the picture is expensive. The owner-earnings multiple stands at 83.6×; owner earnings: the cash an owner could take out each year. The implied growth embedded in that price is around 26% a year, against analyst forecasts of 15%. The market is pricing in far more than analysts expect: heroic expectations.
Growth is moderate; the safety picture is adequate. The company scores 18/20 on our value-creation score: strong value creator. Analyst sentiment is cautious.
Flags to be aware of: Some accounting patterns deserve a closer look. A large part of the company's book value is the price paid for past acquisitions. Reported profits have run ahead of actual cash for several periods. As always: this describes the company's numbers; it is not a recommendation.
360° rank · history
1007550250
Jan 20239
93
2023202420252026
All-time high
95
Mar 2026
All-time low
9
Jan 2023
Average rank
66
across all years
Detailed & Historical Ranks
Deep dive into 15 detailed ranks and 3 years of history.
Current202520242023
Price/Sales
7
5
1
13
Price/Earnings
21
39
35
45
Price/Book
15
16
8
23
Dividend Yield
1
1
1
1
Value (overall)
5
13
6
1
Cells are coloured by rank band (red weak → green strong). Sentiment & 360° history begins 2023.