MODEL VERDICT
Cadence Design Systems, Inc. (CDNS)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.22 | $340.94 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.22 | $332.89 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.22 | $311.03 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.22 | $304.10 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.23 | $265.66 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 4 analyst estimates | $204.84 | -39.9% | 20% | A- | Analyst Est. |
| EV/EBITDA 4 industry peers | $250.32 | -26.6% | 20% | A- | Peer Data |
| Industry Median P/E 3 industry peers | $103.32 | -69.7% | 15% | A | Peer Data |
| Price / Free Cash Flow 4 industry peers | $215.30 | -36.9% | 15% | B+ | Peer Data |
| EV/EBIT 4 industry peers | $341.77 | +0.2% | 8% | B+ | Peer Data |
| EV/FCF 4 industry peers | $236.72 | -30.6% | 7% | B | Model Driven |
| Peg Ratio 2 industry peers | $126.79 | -62.8% | 5% | B | Data |
| EV To Revenue 4 industry peers | $165.63 | -51.4% | 4% | B | Data |
| Price / Sales 4 industry peers | $149.31 | -56.2% | 3% | B | Model Driven |
| Earnings Yield 3 industry peers | $101.60 | -70.2% | 2% | B | Data |
| FCF Yield 4 industry peers | $154.58 | -54.7% | 1% | B | Data |
| Weighted Output Blended model output | $240.52 | -29.4% | 100% | 82 | OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 70× | 77× | 84× (Current) | 91× | 98× |
|---|---|---|---|---|---|
| Bear Case (6%) | $300 | $330 | $360 | $390 | $420 |
| Conservative (9%) | $310 | $341 | $372 | $403 | $434 |
| Base Case (14.0%) | $324 | $356 | $389 | $421 | $454 |
| Bull Case (19%) | $338 | $372 | $405 | $439 | $473 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 62.45 | 71.30 | 19.65 | 78.04 | 20.92 |
| EV/EBIT | 52.40 | 55.86 | 38.53 | 65.36 | 9.45 |
| EV/EBITDA | 46.11 | 47.36 | 31.21 | 56.42 | 9.31 |
| P/FCF | 50.51 | 50.25 | 29.70 | 73.59 | 14.09 |
| P/FFO | 52.68 | 62.59 | 17.50 | 65.79 | 17.29 |
| P/TBV | 36.66 | 42.57 | 15.34 | 48.50 | 12.61 |
| P/AFFO | 58.78 | 68.40 | 18.76 | 74.26 | 19.30 |
| P/B Ratio | 16.38 | 16.09 | 9.25 | 21.82 | 3.88 |
| P/S Ratio | 14.91 | 16.13 | 8.33 | 18.16 | 3.56 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates CDNS's fair value at $240.52 vs the current price of $340.94, implying -29.4% downside potential. Model verdict: Overvalued. Confidence: 82/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $240.52 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $195.28 (P10) to $269.15 (P90), with a median of $231.67.
CDNS's current P/E of 84.0x compares to the industry median of 25.4x (3 peers in the group). This represents a +230.0% premium to the industry. The historical average P/E is 62.5x over 7 years. Signal: High Premium.
31 analysts cover CDNS with a consensus rating of Buy. The consensus price target is $370.83 (range: $275.00 — $425.00), implying +8.8% upside from the current price. Grade breakdown: Strong Buy (0), Buy (26), Hold (4), Sell (1), Strong Sell (0).
The model confidence score is 82/100, based on: data completeness (30), peer quality (22), historical depth (20), earnings stability (8), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Multiple compression: CDNS trades at the 8950th percentile of its historical P/E range. A reversion to median (62.5×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that CDNS's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.7σ, meaning margins are 0.7 standard deviations below their historical average. If margins revert to the 7-year mean (25.8%), the model estimates fair value drops by 830.0% to approximately $313. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.