ATLAS
CDNS

Cadence Design Systems

Strategic Compounder
Semiconductor design software (EDA)·US·San Jose, CA·#2 / 3 in segment·23.7% of segment mcap
$350.89
-16.7% vs S&P 12m

Business overview

Direct AI revenue

EDA pure-play with strong custom IC and verification share, plus growing systems analysis business across automotive and aerospace.

Co-monopolist with Synopsys in chip design tools. Recurring revenue grows roughly with chip complexity, which is on a near-vertical curve.

Products
  • Virtuoso
  • Allegro
  • Palladium emulation
  • Tensilica IP
Competitors (2)

Composite score

Higher = stronger overall research case

67
Fundamental75
Technical54
Valuation49
AI relevance76
Risk-adjusted (higher = safer)65
Segment-relative fundamental percentile: 100

Synthetic 1Y price action

Deterministic price series; 50d (yellow) and 200d (orange) MAs shown

3M RS: 10.0%6M RS: 1.4%12M RS: -16.7%Vol30d: 47%DD52w: -6.0%

Financial summary

Curated, illustrative

Revenue
$5.53B
Growth (YoY)
18.7%
Gross margin
86.1%
Operating margin
29.7%
FCF
$1.50B
Capex
$98.39M
Net cash / (debt)
$-1.54B
ROIC
10.4%
Customer conc.
Medium

Valuation

Market cap
$96.78B
Enterprise value
$98.32B
P/E (TTM)
82.0x
Forward P/E
37.4x
EV / Sales
17.8x
EV / EBITDA
48.8x
P / FCF
64.6x
PEG
3.2x
Rule of 40

Risks

Severity 1 (low) to 5 (severe)

  • 3
    Multiple compression risk
  • 2
    China demand softness

Score components

What drove the composite

Growth67
Profitability83
Cash generation87
Balance sheet69
Moat / AI relevance75
Capital intensity (higher = lighter)80
Customer diversification60
Valuation discipline (dilution)65
Trend (MA50/MA200)65
Momentum (3/6/12m)58
Relative strength38
Realized vol (higher = lower vol)45

Segment peers

Other companies in EDA