Latest Ratios: P/E Ratio 74.6x · EV/EBITDA 44.1x · ROE 21.9%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $83.6B | $85.4B | $82.3B | $74.3B | $44.2B | $52.0B | $38.2B | $19.5B | $12.2B | $11.7B | $7.3B |
| Enterprise Value | $83.0B | $84.9B | $82.2B | $74.0B | $44.2B | $51.3B | $37.7B | $19.2B | $12.1B | $11.8B | $7.6B |
| P/E Ratio → | 74.62 | 76.99 | 78.04 | 71.30 | 51.99 | 74.54 | 64.66 | 19.65 | 35.35 | 57.29 | 36.03 |
| P/S Ratio | 15.78 | 16.13 | 17.73 | 18.16 | 12.40 | 17.39 | 14.22 | 8.33 | 5.72 | 6.03 | 4.04 |
| P/B Ratio | 15.13 | 15.61 | 17.60 | 21.82 | 16.09 | 18.96 | 15.30 | 9.25 | 9.49 | 11.85 | 9.90 |
| P/FCF | 52.65 | 53.84 | 73.59 | 59.59 | 39.53 | 50.25 | 47.09 | 29.70 | 22.50 | 28.39 | 18.78 |
| P/OCF | 48.33 | 49.42 | 65.27 | 55.06 | 35.57 | 47.20 | 42.16 | 26.67 | 20.21 | 24.89 | 16.51 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 16.03 | 17.71 | 18.10 | 12.40 | 17.18 | 14.05 | 8.21 | 5.68 | 6.05 | 4.17 |
| EV / EBITDA | 44.08 | 45.08 | 53.19 | 53.00 | 36.54 | 56.42 | 47.36 | 31.21 | 23.57 | 26.76 | 20.78 |
| EV / EBIT | 50.33 | 51.82 | 55.86 | 56.17 | 41.36 | 65.36 | 57.66 | 38.53 | 29.80 | 35.28 | 26.39 |
| EV / FCF | — | 53.51 | 73.54 | 59.39 | 39.53 | 49.64 | 46.52 | 29.29 | 22.34 | 28.49 | 19.36 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 86.4% | 86.4% | 86.0% | 89.4% | 89.6% | 89.7% | 88.6% | 88.6% | 87.9% | 87.8% | 85.9% |
| Operating Margin | 31.1% | 31.1% | 29.1% | 30.6% | 30.1% | 26.1% | 24.1% | 21.1% | 18.5% | 16.7% | 13.5% |
| Net Profit Margin | 20.9% | 20.9% | 22.7% | 25.5% | 23.8% | 23.3% | 22.0% | 42.3% | 16.2% | 10.5% | 11.2% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 21.9% | 21.9% | 26.1% | 33.9% | 31.0% | 26.6% | 25.7% | 58.3% | 30.4% | 23.6% | 19.2% |
| ROA | 11.6% | 11.6% | 14.4% | 19.3% | 17.8% | 16.7% | 16.2% | 34.0% | 14.1% | 9.0% | 9.1% |
| ROIC | 25.9% | 25.9% | 26.1% | 31.8% | 33.2% | 28.3% | 25.1% | 24.4% | 26.6% | 24.3% | 17.7% |
| ROCE | 20.5% | 20.5% | 23.1% | 31.8% | 29.8% | 23.7% | 22.1% | 22.1% | 22.4% | 19.7% | 14.7% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.45 | 0.45 | 0.55 | 0.22 | 0.32 | 0.17 | 0.18 | 0.20 | 0.35 | 0.74 | 0.93 |
| Debt / EBITDA | 1.32 | 1.32 | 1.67 | 0.55 | 0.73 | 0.50 | 0.58 | 0.70 | 0.86 | 1.66 | 1.90 |
| Net Debt / Equity | — | -0.10 | -0.01 | -0.07 | 0.00 | -0.23 | -0.19 | -0.13 | -0.07 | 0.04 | 0.31 |
| Net Debt / EBITDA | -0.28 | -0.28 | -0.04 | -0.17 | 0.00 | -0.70 | -0.59 | -0.45 | -0.17 | 0.09 | 0.63 |
| Debt / FCF | — | -0.33 | -0.05 | -0.20 | 0.00 | -0.61 | -0.58 | -0.42 | -0.16 | 0.10 | 0.58 |
| Interest Coverage | 14.06 | 14.06 | 19.37 | 36.43 | 46.58 | 46.26 | 31.50 | 26.44 | 17.60 | 12.99 | 12.12 |
Net cash position: cash ($3.0B) exceeds total debt ($2.5B)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 2.86 | 2.86 | 2.93 | 1.24 | 1.27 | 1.77 | 1.86 | 1.74 | 1.34 | 1.53 | 1.20 |
| Quick Ratio | 2.67 | 2.67 | 2.74 | 1.13 | 1.17 | 1.65 | 1.76 | 1.66 | 1.30 | 1.47 | 1.13 |
| Cash Ratio | 1.84 | 1.84 | 2.03 | 0.72 | 0.66 | 1.12 | 1.17 | 1.05 | 0.75 | 1.08 | 0.80 |
| Asset Turnover | — | 0.52 | 0.52 | 0.72 | 0.69 | 0.68 | 0.68 | 0.70 | 0.87 | 0.80 | 0.87 |
| Inventory Turnover | 2.38 | 2.38 | 2.51 | 2.39 | 2.90 | 2.65 | 4.02 | 4.77 | 9.19 | 7.15 | 6.50 |
| Days Sales Outstanding | — | 65.12 | 53.51 | 45.23 | 49.88 | 42.07 | 47.37 | 47.58 | 50.72 | 35.77 | 31.59 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — | — | — | — | — | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 1.3% | 1.3% | 1.3% | 1.4% | 1.9% | 1.3% | 1.5% | 5.1% | 2.8% | 1.7% | 2.8% |
| FCF Yield | 1.9% | 1.9% | 1.4% | 1.7% | 2.5% | 2.0% | 2.1% | 3.4% | 4.4% | 3.5% | 5.3% |
| Buyback Yield | 1.1% | 1.1% | 1.0% | 0.9% | 2.6% | 1.4% | 1.3% | 2.0% | 2.6% | 1.3% | 13.1% |
| Total Shareholder Yield | 1.1% | 1.1% | 1.0% | 0.9% | 2.6% | 1.4% | 1.3% | 2.0% | 2.6% | 1.3% | 13.1% |
| Shares Outstanding | — | $273M | $274M | $273M | $275M | $279M | $280M | $281M | $281M | $280M | $291M |
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying CDNS stock.
Cadence Design Systems, Inc.'s current P/E ratio is 74.6x. The historical average is 53.0x. This places it at the 80th percentile of its historical range.
Cadence Design Systems, Inc.'s current EV/EBITDA is 44.1x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 26.3x.
Cadence Design Systems, Inc.'s return on equity (ROE) is 21.9%. This is above the typical threshold of 15-20% considered good for most companies. The historical average is 9.6%.
Based on historical data, Cadence Design Systems, Inc. is trading at a P/E of 74.6x. This is at the 80th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Cadence Design Systems, Inc. has 86.4% gross margin and 31.1% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Cadence Design Systems, Inc.'s Debt/EBITDA ratio is 1.3x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
Elevated valuation and integration risk
Metrics are mathematically derived from official filings.
Premium Pricing for AI-Driven Design
CDNS trades at 78.6x trailing earnings and 46.4x EV/EBITDA, well above SNPS's 49.5x and 55.6x, according to recent market data, implying expectations of sustained double-digit growth.
The forward P/E of 38.5x suggests the market is pricing in continued acceleration, consistent with the 24.2% revenue growth reported in Q2 2026. However, the PEG of 5.62 indicates that the growth premium may already be stretched, leaving little room for execution missteps. Investors should monitor whether AI-driven design tools can sustain the growth trajectory that justifies this multiple relative to peers.
Margin Resilience Amid Hardware Mix
Gross margin swung from 95.8% in Q1 2026 to 84.9% in Q2 2026, as reported in financial statements, reflecting hardware sales, yet operating margin held at 28.4%, demonstrating the scalability of the software model.
The quarterly gross margin volatility is a function of Palladium hardware deliveries, not a deterioration in the core software business. Operating margin of 28.4% in Q2 2026, though down from 33.8% in Q3 2025, remains robust and suggests that the company can absorb hardware cost fluctuations while maintaining profitability. The net margin of 23.2% is supported by strong operating leverage, but investors should adjust for stock-based compensation, which totaled $146.9M in Q2 2026, to assess true earning power.
ROIC Volatility Masks Underlying Strength
ROIC dipped to 4.2% in Q2 2026 from 7.4% in Q4 2024, as per the latest data, reflecting a doubling of invested capital from acquisitions, though the underlying business remains highly profitable.
The decline in ROIC is primarily due to the $2.1B acquisition outflow in Q1 2026, which expanded the capital base faster than operating income. This is a temporary distortion rather than a decay in competitive advantage, as the company's high gross margins and recurring revenue suggest strong economic returns over time. Investors should monitor whether acquired assets, particularly in system analysis, generate returns that justify the capital deployed.
Working Capital Swings Distort Efficiency
CCC swung from -176 days in Q1 2026 to +23 days in Q2 2026, based on reported figures, driven by extreme DPO volatility, indicating that working capital metrics are unreliable indicators of operational efficiency.
The negative CCC in Q1 2026 was an anomaly caused by a spike in DPO to 694 days, likely due to timing of payments, while Q2 2026 normalized to 173 days. Asset turnover of 0.13x is low due to the capital-intensive acquisition, but this understates the efficiency of the software business, which generates high margins on minimal tangible assets. Investors should focus on cash conversion metrics, which show OCF exceeding net income in seven of the last ten quarters.
Leverage Rises but Coverage Remains Comfortable
D/E rose to 0.36 in Q2 2026 from 0.18 in Q1 2024, as reported in the balance sheet, yet interest coverage of 12.9x indicates debt service remains manageable despite increased borrowing for acquisitions.
The increase in leverage is a result of funding the $2.1B acquisition spree, but the absolute level is still conservative relative to peers like SNPS (D/E 0.50). Interest coverage, though down from 36.7x in Q1 2024, remains healthy and suggests that the company can comfortably service its debt. However, the goodwill-heavy balance sheet (40.5% of assets) introduces impairment risk that could pressure equity if acquisitions underperform.
Liquidity Buffer Compresses After Acquisitions
Current ratio fell to 1.74 in Q2 2026 from 3.07 in Q1 2025, as per the latest balance sheet, with cash dropping to $1.4B, reflecting the cash outflow for acquisitions and increased short-term obligations.
The liquidity position remains adequate, but the compression is notable and warrants monitoring. The quick ratio of 1.53 indicates that the company can cover short-term liabilities without relying on inventory, which is minimal. However, the $2.1B acquisition outflow in Q1 2026 has reduced the cash buffer, and investors should ensure that future acquisitions do not strain liquidity further, especially given the elevated valuation and potential for market volatility.
Misapplied Metric: P/E on Reported EPS
The trailing P/E of 78.6x is often used to gauge CDNS's value, but it is distorted by stock-based compensation and hardware revenue timing, as disclosed in financial statements, obscuring the true earnings power.
Reported EPS includes significant non-cash SBC, which overstates the cost of equity and inflates the P/E multiple. A more appropriate metric is EV/EBITDA, which at 46.4x still appears rich but better captures the company's cash-generating ability. Additionally, investors should adjust for the lumpiness of hardware revenue by using forward estimates or RPO growth, which provides a clearer view of the underlying software demand. This adjustment reveals a business that is growing faster than the P/E implies, but also one that is priced for perfection.