CDNS · Intrinsic value
Is Cadence Design Systems, Inc. (CDNS) overvalued or undervalued?
Cadence Design Systems, Inc. (CDNS) trades at the delayed market price of $327.91 a share. That price already implies revenue growth of more than 25%/yr. TickerWorth's fair value is $158.34 a share (107% above fair value), as of Oct 19, 2026. It is a model estimate, and every input behind it is sourced below.
Model by Miraaj Patel · generated from SEC filings and market data · Updated Oct 19, 2026 · How these pages are made
Is CDNS overvalued?
- Fair value
- $158.34
- Market price
- $327.91
- Downside to fair value
- 51.7%
- Verdict
- 107% above fair value
Reverse DCF, on our cash-flow model rather than the fair value above: Today's price implies revenue growth of more than 25%/yr. Above about 25% a year the reverse-DCF stops being informative. It solves for revenue growth alone — holding margins, capital intensity and the forecast horizon fixed — so a price well above our cash-flow model's value has nowhere to go but growth, and the solver returns a rate the model can't reconcile. Read it as "the price implies growth we can't justify", not as a forecast.
What is CDNS's TickerWorth Score?
Priced richly vs peers — the business scores well
Compared with Technology companies in US
Its strongest point: a profitable, high-quality business. Its weakest: looks expensive on the numbers.
- Value · 25 of 100
Cheaper than 25% of Technology companies in US
- Price vs worth · 9 of 100
- Quality · 81 of 100
More profitable than 81% of Technology companies in US
- Financial health · 49 of 100
Financially stronger than 49% of Technology companies in US
- Growth · 60 of 100
Growing faster than 60% of Technology companies in US
- Momentum · 44 of 100
Outperformed 44% of Technology companies in US over the past year
Confidence: Medium confidence · Scored
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CDNS DCF valuation: what the price assumes
At a recent price of $327.90, Cadence Design Systems, Inc. (CDNS) trades 107% above TickerWorth's blended fair value of $158.34 per share. For this company that blend leans on peer multiples: our discounted-cash-flow model holds margins flat and fades growth toward a long-run rate, which systematically understates a business growing this fast, so its figure (about $75.02) is shown as a reference beside the range rather than blended into it. Our estimate sits below the market — read that as a statement about how the market prices CDNS against comparable companies, not as a finding that it is overvalued on cash flow. This is an educational model, not a price target or a recommendation.
Read the full reasoning
The valuation discounts Cadence Design Systems, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 10.4%, with a long-run terminal growth rate of 2.5%. About 71% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — CDNS would need sustained revenue growth of more than 25%/yr to justify today's price, against about 11.3% a year compounded in our base case. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, CDNS's modeled DCF value ranges from about $57.52 to $108.48 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Cadence Design Systems, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of CDNS's intrinsic value. Figures update as new filings and prices come in.
Every input behind CDNS's DCF
| Input | Value |
|---|---|
| Base-year revenueCADENCE DESIGN SYSTEMS, INC. FY2025 10-K (accession 0000813672-26-000016): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025 full year. | $5,296,760,000 |
| Base EBIT marginCADENCE DESIGN SYSTEMS, INC. FY2025 10-K (accession 0000813672-26-000016): us-gaap:OperatingIncomeLoss 1,492,042,000 / revenue 5,296,759,000 = 28.17%, FY2025. | 28.2% |
| Forecast revenue growthESTIMATEAssumption — TickerWorth's 5-year explicit forecast | 19% → 15% → 11% → 8% → 4% |
| Risk-free rateLive feed — US 10-year Treasury yield (^TNX) | 5.2% |
| BetaLive feed — yfinance, 5-year monthly beta vs the S&P 500 (clamped to 0.4–2.5) | 1.13 |
| Terminal growthESTIMATEAssumption — TickerWorth house default 2.5%, held below WACC | 2.5% |
| Diluted sharesCADENCE DESIGN SYSTEMS, INC. FY2025 10-K (accession 0000813672-26-000016): WeightedAverageNumberOfDilutedSharesOutstanding = 273,312,000 shares, FY2025. | 273M |
| Market priceLast known price · as of 2026-10-19 22:16 UTC | $327.90 |
Change CDNS's assumptions
The discount-rate dial and the editable model
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What does Cadence Design Systems, Inc. do?
What does it do?
Cadence Design Systems, Inc. develops computational, AI-driven software, hardware, and silicon intellectual property products and solutions. It operates in the Software - Application industry (Technology sector), headquartered in United States. The company employs roughly 15,445 people.
How does it make money?
The business turns $5.3B in annual revenue into profit. Out of every $100 of sales, about $29 is left as operating profit (operating margin of 28.6%), after a 86% gross margin on the products/services it sells. After all costs, taxes and interest, 23.6% of revenue becomes bottom-line net profit.
Is it financially healthy?
Financially it looks solid: carries modest debt (0.4× equity), comfortably covers its short-term bills (1.7× current ratio), and is currently profitable.
CDNS insider trading
We have no recent SEC Form 4 insider filings on file for Cadence Design Systems, Inc.. Form 4 covers US-listed companies only.
Common questions
What is CDNS's intrinsic value?
TickerWorth's blended fair value for Cadence Design Systems, Inc. (CDNS) is $158.34 per share, versus a market price of $327.90 (107% above fair value).
Is CDNS overvalued or undervalued?
Our cash-flow model understates a business growing this fast, so we don't call CDNS overvalued on it. Against a blend that leans on peer multiples, the price of $327.90 sits 107% above our estimate. This is an educational estimate, not advice.
What discount rate is used for CDNS?
A WACC of 10.4% and a terminal growth rate of 2.5%.
Is Cadence Design Systems stock undervalued?
TickerWorth's fair value for Cadence Design Systems, Inc. (CDNS) is $158.34 against a market price of $327.91. Our read: 107% above fair value. This is a model estimate, not investment advice.
Cadence Design Systems (CDNS) DCF valuation and fair value
Our fair value for Cadence Design Systems, Inc. (CDNS) is $158.34, built on a 10.4% discount rate (WACC) and 2.5% terminal growth. It blends our discounted-cash-flow model with other valuation lenses. Every assumption is listed on this page with its source.
What growth is priced into Cadence Design Systems stock?
Today's price implies revenue growth of more than 25%/yr. Above about 25% a year the reverse-DCF stops being informative. It solves for revenue growth alone — holding margins, capital intensity and the forecast horizon fixed — so a price well above our cash-flow model's value has nowhere to go but growth, and the solver returns a rate the model can't reconcile. Read it as "the price implies growth we can't justify", not as a forecast. This is a reverse DCF: it holds our cash-flow model's other inputs and solves for the revenue growth that makes the model equal today's price of $327.91. A model estimate, not investment advice.
Cadence Design Systems (CDNS) insider trading
We have no recent SEC Form 4 insider filings on file for Cadence Design Systems, Inc. (CDNS). Form 4 covers US-listed companies only.
Stocks below our fair value instead
Not investment advice. TickerWorth Score is a model output.
Educational tool. Every output reflects the assumptions shown — not a prediction and not investment advice. TickerWorth is not a licensed investment adviser, and these figures are estimates from public filings and market data that can be wrong.