Cadence Design Systems, Inc.

XTRA:CDS Stock Report

Market Cap: €67.7b

Cadence Design Systems Valuation

Is CDS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Future Cash Flow Value

  • Significantly Below Future Cash Flow Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of CDS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

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Learn how to determine fair value like the best investors in the world.

Below Future Cash Flow Value: CDS (€248.4) is trading above our estimate of future cash flow value (€185.6)

Significantly Below Future Cash Flow Value: CDS is trading above our estimate of future cash flow value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CDS?

Key metric: As CDS is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for CDS. This is calculated by dividing CDS's market cap by their current earnings.
What is CDS's PE Ratio?
PE Ratio56.9x
EarningsUS$1.38b
Market CapUS$78.47b

Price to Earnings Ratio vs Peers

How does CDS's PE Ratio compare to its peers?

The above table shows the PE ratio for CDS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average22.3x
SAP SAP
26.2x11.70%€205.2b
NEM Nemetschek
27.4x16.52%€6.7b
AOF ATOSS Software
27.7x12.76%€1.4b
TMV TeamViewer
7.7x6.82%€991.7m
CDS Cadence Design Systems
56.9x12.73%€78.5b

Price-To-Earnings vs Peers: CDS is expensive based on its Price-To-Earnings Ratio (56.9x) compared to the peer average (22.3x).

Historical Price to Earnings Ratio

Historical Price to Earnings Ratio compares a stock's price to its earnings over time. Higher ratios indicate that investors are willing to pay more for the stock.

Fetching historical data

Price to Earnings Ratio vs Industry

How does CDS's PE Ratio compare vs other companies in the DE Software Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No more companies available in this PE range
CDS 56.9xIndustry Avg. 22.3xNo. of Companies5PE020406080100+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: CDS is expensive based on its Price-To-Earnings Ratio (56.9x) compared to the European Software industry average (22.3x).

Price to Earnings Ratio vs Fair Ratio

What is CDS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CDS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio56.9x
Fair PE Ratio31.3x

Price-To-Earnings vs Fair Ratio: CDS is expensive based on its Price-To-Earnings Ratio (56.9x) compared to the estimated Fair Price-To-Earnings Ratio (31.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst CDS forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€248.40
€346.91
+39.66%
8.85%€405.47€258.81n/a28
Sep ’27€275.75
€347.93
+26.18%
8.90%€405.66€258.93n/a27
Aug ’27€292.65
€349.94
+19.58%
8.82%€407.44€260.07n/a26
Jul ’27€334.40
€341.93
+2.25%
9.64%€395.78€241.86n/a25
Jun ’27€345.20
€330.23
-4.34%
8.63%€378.44€236.53n/a26
May ’27€276.90
€323.79
+16.93%
8.33%€362.65€234.66n/a27
Apr ’27€242.45
€322.54
+33.03%
8.06%€355.80€238.65n/a27
Mar ’27€250.35
€315.04
+25.84%
8.21%€347.39€233.01n/a26
Feb ’27€249.25
€320.07
+28.41%
8.17%€345.71€231.88n/a26
Jan ’27€270.10
€325.72
+20.59%
8.07%€355.51€233.89n/a26
Dec ’26€267.30
€330.95
+23.81%
8.04%€360.07€236.89n/a25
Nov ’26€292.90
€327.04
+11.66%
11.00%€361.40€194.54n/a24
Oct ’26€299.70
€314.91
+5.08%
12.30%€349.36€170.42n/a23
Sep ’26n/a
€316.32
0%
12.30%€350.92€171.18€275.7523
Aug ’26n/a
€320.59
0%
12.53%€359.08€175.16€292.6523
Jul ’26n/a
€273.55
0%
9.86%€311.82€170.86€334.4023
Jun ’26n/a
€282.22
0%
11.36%€330.30€176.16€345.2023
May ’26n/a
€282.82
0%
10.43%€314.42€177.14€276.9023
Apr ’26n/a
€295.51
0%
11.16%€327.95€184.76€242.4522
Mar ’26n/a
€309.51
0%
9.75%€339.20€214.99€250.3522
Feb ’26n/a
€310.66
0%
10.94%€350.55€216.09€249.2522
Jan ’26n/a
€309.42
0%
10.91%€352.33€217.19€270.1021
Dec ’25n/a
€299.72
0%
11.54%€345.71€216.07€267.3020
Nov ’25n/a
€284.30
0%
11.29%€328.30€208.08€292.9018
Oct ’25n/a
€278.03
0%
12.42%€317.65€201.33€299.7016
Sep ’25n/a
€284.12
0%
10.56%€317.41€214.58n/a15
€350.54
Fair Value
29.1% undervalued intrinsic discount
28
Number of Analysts

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2026/09/11 17:50
End of Day Share Price 2026/09/11 00:00
Earnings2026/06/30
Annual Earnings2025/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Cadence Design Systems, Inc. is covered by 37 analysts. 26 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Joseph VruwinkBaird
Nay Soe NaingBerenberg
Gustav FrobergBerenberg