Cadence Design Systems, Inc.

NasdaqGS:CDNS Stock Report

Mkt Cap: US$50.2b

We’ve recently updated our valuation analysis.

Cadence Design Systems Valuation

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

Valuation Score

0/6

Valuation Score 0/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

CDNS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue14.5x
Enterprise Value/EBITDA41.6x
PEG Ratio3.7x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for CDNS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average56.3x
SNPS Synopsys
54.8x16.1%US$53.9b
ADSK Autodesk
75x21.7%US$46.4b
ROP Roper Technologies
45.9x14.2%US$45.3b
ANSS ANSYS
49.5x13.4%US$23.2b
CDNS Cadence Design Systems
63.9x17.2%US$50.2b

Price-To-Earnings vs Peers: CDNS is expensive based on its Price-To-Earnings Ratio (66x) compared to the peer average (58x).


Price to Earnings Ratio vs Industry

How does CDNS's PE Ratio compare vs other companies in the US Software Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a20.8%
n/an/an/a

Price-To-Earnings vs Industry: CDNS is expensive based on its Price-To-Earnings Ratio (66x) compared to the US Software industry average (43.2x)


Price to Earnings Ratio vs Fair Ratio

What is CDNS'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.

CDNS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio63.9x
Fair PE Ratio33.9x

Price-To-Earnings vs Fair Ratio: CDNS is expensive based on its Price-To-Earnings Ratio (66x) compared to the estimated Fair Price-To-Earnings Ratio (33.9x).


Share Price vs Fair Value

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

Below Fair Value: CDNS ($188.89) is trading above our estimate of fair value ($126.69)

Significantly Below Fair Value: CDNS is trading above our estimate of fair value.


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 CDNS forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$182.83
US$191.63
+4.8%
8.3%US$215.00US$161.00n/a15
Jan ’24US$160.64
US$188.29
+17.2%
8.6%US$215.00US$161.00n/a15
Dec ’23US$176.78
US$187.76
+6.2%
8.3%US$215.00US$161.00n/a15
Nov ’23US$150.93
US$187.76
+24.4%
8.3%US$215.00US$161.00n/a15
Oct ’23US$163.43
US$195.64
+19.7%
7.4%US$215.00US$157.00n/a14
Sep ’23US$170.04
US$194.92
+14.6%
7.9%US$215.00US$157.00n/a12
Aug ’23US$185.04
US$189.59
+2.5%
10.6%US$215.00US$148.50n/a11
Jul ’23US$149.64
US$182.65
+22.1%
11.2%US$215.00US$146.00n/a13
Jun ’23US$153.22
US$181.39
+18.4%
11.3%US$215.00US$146.00n/a14
May ’23US$150.85
US$184.20
+22.1%
10.0%US$215.00US$146.00n/a14
Apr ’23US$165.63
US$181.39
+9.5%
10.7%US$211.00US$138.00n/a15
Mar ’23US$150.53
US$181.95
+20.9%
12.2%US$211.00US$127.00n/a15
Feb ’23US$151.61
US$182.39
+20.3%
12.5%US$210.00US$114.00US$182.8316
Jan ’23US$186.35
US$178.70
-4.1%
12.0%US$207.20US$114.00US$160.6416
Dec ’22US$175.05
US$176.18
+0.6%
10.9%US$200.00US$114.00US$176.7816
Nov ’22US$173.84
US$176.18
+1.3%
10.9%US$200.00US$114.00US$150.9316
Oct ’22US$153.01
US$160.00
+4.6%
10.1%US$175.00US$106.00US$163.4315
Sep ’22US$164.15
US$160.00
-2.5%
10.1%US$175.00US$106.00US$170.0415
Aug ’22US$147.65
US$158.27
+7.2%
10.0%US$175.00US$106.00US$185.0415
Jul ’22US$136.93
US$152.29
+11.2%
10.0%US$165.00US$106.00US$149.6414
Jun ’22US$125.75
US$151.86
+20.8%
10.0%US$165.00US$106.00US$153.2214
May ’22US$131.77
US$151.86
+15.2%
10.0%US$165.00US$106.00US$150.8514
Apr ’22US$141.49
US$150.01
+6.0%
8.5%US$160.00US$106.00US$165.6316
Mar ’22US$147.44
US$149.80
+1.6%
8.8%US$160.00US$106.00US$150.5315
Feb ’22US$134.40
US$125.40
-6.7%
14.6%US$155.00US$80.00US$151.6115

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


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