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Upturn AI Summary - About
Cadence Design Systems Inc(CDNS)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for CDNS
09/28/2026: CDNS (3-star) is currently NOT-A-BUY. Pass it for now.
Cadence Design Systems is a foundational provider of electronic design automation software and hardware, essential for designing modern semiconductors and complex electronic systems. The company holds a leading position in the chip design ecosystem, characterized by strong recurring revenue and high margins due to the mission-critical nature of its tools. Cadence is currently capitalizing on the surge in AI-optimized silicon demand and shifting into system-level simulation. Key risks include geopolitical exposure, the potential for high-valuation volatility, and intense competition from Synopsys. While not a source of dividend income, the stock is often considered a strong fit for growth-oriented investors looking for stable exposure to the semiconductor industry.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Strong fit | Cadence offers exposure to secular semiconductor growth through high-margin, mission-critical software. |
| Momentum investor | Strong fit while signal remains positive | The stock has historically tracked the growth of the semiconductor sector and AI infrastructure spending. |
| Value investor | Weak fit | The company typically trades at a high price-to-earnings multiple due to its quality and market position. |
| Dividend investor | Weak fit | Cadence does not pay a meaningful dividend, prioritizing share repurchases and reinvestment. |
| Low-risk investor | Mixed fit | While the business model is highly resilient, the stock can experience significant volatility due to its valuation and tech sector exposure. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | Medium / high | High P/E multiples make the stock sensitive to changes in interest rates and sector sentiment. |
| Valuation risk | High | Investors pay a premium for the company's growth, leaving little room for error in earnings reports. |
| Competition risk (AI competition) | Medium | While the EDA duopoly is entrenched, new AI-native software entrants could disrupt traditional design workflows. |
| Business quality | Strong | The company provides indispensable tools with high switching costs, resulting in a durable competitive advantage. |
| Dividend income | Low / none | Investors should not expect income generation from this equity. |
| Execution risk | Medium | Maintaining technical superiority over peers like Synopsys requires constant, heavy R&D investment. |
Price Behavior
Rolling Over
The price momentum is slowing down and beginning to turn downward.
Moderately Choppy
The stock has experienced noticeable price swings while retaining some directional structure.
Analysis of Past Performance
Type Stock | Historic Profit 23.07% | Avg. Invested days 53 | Today’s Advisory PASS |
Upturn Advisory Rating  | Upturn Advisory Performance  4.0 | Stock Returns Performance  3.0 |
| Profits based on simulation | Last Close 09/28/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 89.81B USD | Price to earnings Ratio 64.97 | 1Y Target Price 405.47 |
Price to earnings Ratio 64.97 | 1Y Target Price 405.47 | ||
Volume (30-day avg) 2.5M shares | Beta 1.14 | 52 Weeks Range 262.75 - 416.69 | Updated Date 09/27/2026 |
52 Weeks Range 262.75 - 416.69 | Updated Date 09/27/2026 | ||
Dividends yield (FY) - | Basic EPS (TTM) 5.02 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Product Licenses | Time-based software licenses for EDA tools and IP cores. | The primary source of revenue is recurring software subscriptions that design teams rely on to build chips. |
| Maintenance & Services | Support, software updates, and engineering services. | This provides a steady, high-margin revenue stream that keeps customers locked into the Cadence ecosystem. |
| Hardware | Palladium and Protium emulation and prototyping hardware. | High-ticket hardware sales help customers verify complex chip designs before manufacturing. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Valuation
Trailing PE 64.97 | Forward PE 31.55 | Enterprise Value 86.33B | Price to Sales(TTM) 15.39 |
Enterprise Value 86.33B | Price to Sales(TTM) 15.39 | ||
Enterprise Value to Revenue 14.5 | Enterprise Value to EBITDA 37.18 | Shares Outstanding 275.39M | Shares Floating 274.17M |
Shares Outstanding 275.39M | Shares Floating 274.17M | ||
Percent Insiders 0.33 | Percent Institutions 91.61 |
Upturn AI Summary
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
About Cadence Design Systems Inc
Exchange NASDAQ | Headquarters San Jose, CA, United States | ||
IPO Launch date 1987-06-10 | CEO, President & Director Dr. Anirudh Devgan Ph.D. | ||
Sector Technology | Industry Software - Application | Full time employees 15445 | Website https://www.cadence.com |
Full time employees 15445 | Website https://www.cadence.com | ||
Cadence Design Systems, Inc. develops computational, AI-driven software, hardware, and silicon intellectual property products and solutions. The company offers functional verification services, such as Jasper, a formal verification platform; Xcelium, a parallel logic simulation platform; Verisium, a generative AI solution; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification, as well as digital IC design and sign off products, including In novus platform; and custom IC design and simulation product include Virtuoso, a platform to design and verify analog. It also provides Xcelium logic simulator and other front-end verification and virtual prototyping technologies; controllers and physical interfaces; PCI Express, universal accelerator and compute express links, and multiple memory interfaces; and Ten Silica, a digital signal processor. In addition, the company's design IP portfolio includes serializer/deserializer, peripheral component interconnect, USB, and other standard protocols; and Secure-IC, a solution for embedded security IP. Additionally, it provides System Design and Analysis (SD&A) platform, a solution that enables end-to-end system-level design and verification across chips, packages, PCBs, and electronic systems; Allegro X and Orca X platforms for PCB and advanced packaging; Sigrity X for signal and power integrity; AIR for RF design; Fidelity for computational fluid dynamics; Celsius for thermal and airflow analysis; Clarity 3D solver for electromagnetic and power electronics analysis and simulation; Integrity 3D-IC solution for 3D-IC and multi-chiplet designs; the Optimality Intelligent System Explorer, Reality digital twin, and Millennium enterprise multiphasic platforms; Allegro system design platform; and molecular modeling and simulation solutions and services. The company has a strategic collaboration with NVIDIA. The company was incorporated in 1987 and is headquartered in San Jose, California.
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