Cadence Design Systems, Inc.

DB:CDS Stock Report

Market Cap: €79.2b

Cadence Design Systems Valuation

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

Valuation Score

0/6

Valuation Score 0/6

  • Below Fair Value

  • Significantly Below Fair 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.

Below Fair Value: CDS (€287.7) is trading above our estimate of fair value (€228.4)

Significantly Below Fair Value: CDS is trading above our estimate of fair 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 Ratio80.4x
EarningsUS$1.04b
Market CapUS$83.56b

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 Average54.6x
SAP SAP
93.7x40.7%€257.3b
NEM Nemetschek
65.4x18.6%€11.2b
TMV TeamViewer
14.7x11.1%€1.7b
AOF ATOSS Software
44.7x7.8%€2.0b
CDS Cadence Design Systems
80.4x16.4%€83.6b

Price-To-Earnings vs Peers: CDS is expensive based on its Price-To-Earnings Ratio (80.4x) compared to the peer average (54.6x).

Price to Earnings Ratio vs Industry

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

7 CompaniesPrice / EarningsEstimated GrowthMarket Cap
CDS 80.4xIndustry Avg. 26.9xNo. of Companies19PE020406080100+
7 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: CDS is expensive based on its Price-To-Earnings Ratio (80.4x) compared to the European Software industry average (26.9x).

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 Ratio80.4x
Fair PE Ratio40.7x

Price-To-Earnings vs Fair Ratio: CDS is expensive based on its Price-To-Earnings Ratio (80.4x) compared to the estimated Fair Price-To-Earnings Ratio (40.7x).

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€287.70
€299.72
+4.2%
11.5%€345.71€216.07n/a20
Nov ’25€260.40
€284.30
+9.2%
11.3%€328.30€208.08n/a18
Oct ’25€246.25
€278.03
+12.9%
12.4%€317.65€201.33n/a16
Sep ’25€241.80
€284.12
+17.5%
10.6%€317.41€214.58n/a15
Aug ’25€248.95
€294.23
+18.2%
10.3%€327.27€221.26n/a16
Jul ’25€285.45
€302.54
+6.0%
8.9%€330.61€223.51n/a17
Jun ’25€259.30
€300.39
+15.8%
8.9%€324.07€222.22n/a17
May ’25€261.30
€301.47
+15.4%
8.5%€326.45€223.85n/a18
Apr ’25€289.80
€292.43
+0.9%
8.4%€322.98€221.47n/a17
Mar ’25€284.20
€292.43
+2.9%
8.4%€322.98€221.47n/a17
Feb ’25€268.60
€265.05
-1.3%
10.8%€300.67€192.76n/a13
Jan ’25€249.00
€253.99
+2.0%
9.7%€288.54€191.44n/a15
Dec ’24€249.40
€255.81
+2.6%
9.3%€289.84€197.32n/a16
Nov ’24€230.40
€255.81
+11.0%
9.3%€289.84€197.32€260.4016
Oct ’24€224.00
€239.32
+6.8%
11.6%€279.54€150.02€246.2516
Sep ’24€226.20
€234.27
+3.6%
11.3%€274.98€147.57€241.8016
Aug ’24€211.40
€231.84
+9.7%
11.3%€272.13€146.04€248.9516
Jul ’24€209.60
€210.57
+0.5%
10.0%€238.26€147.54€285.4516
Jun ’24€217.60
€209.22
-3.9%
9.0%€231.19€150.08€259.3015
May ’24€189.00
€201.46
+6.6%
8.8%€218.78€146.77€261.3015
Apr ’24€189.40
€199.39
+5.3%
7.9%€221.65€151.86€289.8015
Mar ’24€181.54
€199.39
+9.8%
7.9%€221.65€151.86€284.2015
Feb ’24€167.16
€177.56
+6.2%
8.3%€199.22€149.18€268.6015
Jan ’24€151.12
€178.89
+18.4%
8.8%€202.83€151.89€249.0015
Dec ’23€163.54
€190.05
+16.2%
8.3%€217.62€162.96€249.4015
Nov ’23€154.56
€190.05
+23.0%
8.3%€217.62€162.96€230.4015

Analyst Forecast: Target price is less than 20% higher than the current share price.

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