Cadence Design Systems (CDNS)
Forward P/E 35.77x is 2.10x the peer median of 17.03x, with trailing P/E 66.99x, P/S 15.41x and PEG 2.09 — a premium far above the 1.3x level the rules require exceptional growth to justify. Latest-quarter revenue grew a strong +22.0% year over year (PRIMARY/EDGAR), but that is well short of the +50% exceptional-growth test, and PEG above 2 confirms growth does not pay for the premium. This is OVERVALUED, not BUBBLE: earnings are real and substantial and delivered growth supports a premium, just not one this large. Delivered demand check: the cluster median grew +14.9% year over year — demand rising.
What would change this label: Moves toward FAIRLY PRICED if revenue growth accelerates to +35% or better for two consecutive quarters with the forward P/E unchanged, or the price falls enough to bring the forward P/E to about 25x or below at unchanged estimates. Moves toward BUBBLE territory if revenue growth slows below +10% year over year while the forward P/E stays above 35x.
Cadence makes essential chip-design software and is growing at a healthy 22%, but its shares cost about 36 times next year's expected profit — roughly double what similar software companies cost. You are paying a very full price for a good business, so any slowdown would likely hurt the share price.
Both lines start at 100 on 2020-09-01. Over the full window Cadence Design Systems returned +201.00% and the S&P 500 +118.28% (price returns; dividends not reinvested). Worst peak-to-trough fall for Cadence Design Systems: -34.2% (2026-06-02 to 2026-09-15). Source: Nasdaq official daily history.
What the label rests on
Forward P/E 35.77x is 2.10x the peer median of 17.03x, with trailing P/E 66.99x, P/S 15.41x and PEG 2.09 — a premium far above the 1.3x level the rules require exceptional growth to justify. Latest-quarter revenue grew a strong +22.0% year over year (PRIMARY/EDGAR), but that is well short of the +50% exceptional-growth test, and PEG above 2 confirms growth does not pay for the premium. This is OVERVALUED, not BUBBLE: earnings are real and substantial and delivered growth supports a premium, just not one this large. Delivered demand check: the cluster median grew +14.9% year over year — demand rising. The company’s forward P/E is 35.8× against a peer median of 17.0×. Its own history: UNVERIFIED — no sourced range available. Sector demand read: Delivered demand check: the Application software group's median latest-quarter revenue growth was 14.9% year over year (SEC filings) — demand rising. Latest-quarter sales growth was +22.0% versus a year earlier (SEC filings).
| Company | Price (Oct 28, 2026) | Forward P/E | Trailing P/E |
|---|---|---|---|
| Cadence Design Systems (CDNS) | $336.92 | 35.8× | 67.0× |
| ADBE | $248.09 | 9.2× | 13.8× |
| SNPS | $474.42 | 26.9× | 84.1× |
| INTU | $328.07 | 13.8× | 19.9× |
| DDOG | $280.37 | 105.7× | 571.6× |
| WDAY | $205.46 | 17.0× | 42.3× |
| Peer median | 17.0× |
Multiples: stockanalysis.com (SECONDARY, S&P Global data), fetched Oct 28, 2026. Peer set chosen by sector; the median is the middle value of the set. The label and its numbers were recorded in the programme’s label registry on Oct 28, 2026 and will be scored at 6 and 12 months.
Sales, profit and cash
This company does not report a gross-profit line in its SEC facts (normal for banks, payment networks and some health insurers), so profit is shown as net income instead — gross margin is marked UNVERIFIED-absent rather than estimated.
Free cash flow = cash from operations minus spending on plant and equipment, both from the company’s SEC cash-flow statement. Gaps are quarters where that spending line is not separately tagged in the filings — shown as gaps, never estimated.
| Quarter | Sales | Gross margin | Net income | EPS (GAAP, diluted) | Free cash flow |
|---|---|---|---|---|---|
| Q/E Sep 2026 2026-09-30 | $1.6B | — | $290M | 1.05 | $362M |
| Q/E Jun 2026 2026-06-30 | $1.6B | — | $367M | 1.33 | $582M |
| Q/E Mar 2026 2026-03-31 | $1.5B | — | $336M | 1.23 | $307M |
| Q/E Dec 2025 2025-12-31 | $1.4B | — | $388M | — | $512M |
| Q/E Sep 2025 2025-09-30 | $1.3B | — | $287M | 1.05 | $277M |
| Q/E Jun 2025 2025-06-30 | $1.3B | — | $160M | 0.59 | $334M |
| Q/E Mar 2025 2025-03-31 | $1.2B | — | $274M | 1.00 | $464M |
| Q/E Dec 2024 2024-12-31 | $1.4B | — | $340M | — | $404M |
| Q/E Sep 2024 2024-09-30 | $1.2B | — | $238M | 0.87 | $383M |
| Q/E Jun 2024 2024-06-30 | $1.1B | — | $230M | 0.84 | $127M |
| Q/E Mar 2024 2024-03-31 | $1.0B | — | $248M | 0.91 | $204M |
| Q/E Dec 2023 2023-12-31 | $1.1B | — | $324M | — | $238M |
The last twelve reported quarters. Full 25-quarter history sits in the data pack behind this page. A dash means the figure is not tagged as a standalone quarter in the company’s SEC facts (the usual case is the fourth quarter, which many companies only report inside the full-year filing) — it is missing, not zero.
Earnings: getting better or worse?
Each box is one quarter’s earnings per share (EPS). Green means EPS was higher than the same quarter a year earlier; red means lower; a dash means the figure is not tagged in the filings.
Basis: GAAP diluted EPS from SEC company facts, compared with the same quarter a year earlier.
Key facts
| Item | Value |
|---|---|
| Company (legal name in filings) | CADENCE DESIGN SYSTEMS INC |
| Chief executive | Anirudh Devgan (source: https://newsroom.lamresearch.com/2026-02-03-Lam-Research-Appoints-Cadence-CEO-Anirudh-Devgan-to-Board-of-Directors) |
| Sector | Technology — Application Software — sells electronic design automation software used to design chips and electronic systems |
| Share price (Oct 28, 2026) | $336.92 |
| Market value (market cap) | $94.1B — share price times shares outstanding of 274,379,000 (SEC filings; SEC EDGAR dei EntityCommonStockSharesOutstanding (latest)) |
| Sales, last twelve months | $6.1B |
| Net income, last twelve months | $1.4B |
| Free cash flow, last twelve months | $1.8B |
| Latest reported quarter | Q/E Sep 2026 (of 25 quarters in the data pack) |
| Six-year price return vs S&P 500 | +201.00% vs +118.28% |
| Worst peak-to-trough fall | -34.2% (2026-06-02 to 2026-09-15) |
What we could not verify
- Gross profit / gross margin: not tagged as a standalone line in this company's EDGAR company facts (common for banks, payment networks and some healthcare payers) — shown as UNVERIFIED-absent; the page charts revenue and net income instead.
- TTM GAAP diluted EPS could not be summed from company facts because at least one of the last four quarters (typically Q4) has no standalone tagged EPS; trailing P/E is therefore taken from the labelled secondary source in valuation_label.md.
- Own-history P/E range not yet compiled for this company in the Phase 1 batch run; the label rests on peer-median, growth and PEG evidence.
- Guidance record (each quarter scored against the guidance the company gave the quarter before) is not yet compiled for this company — it is a Phase 2 layer. The earnings strip below therefore uses reported EPS versus a year earlier, which is fully sourced from filings.
The IT factor — the most exciting thing the market is overlooking — is not assessed on an X-Ray page. It belongs to the Deep Dive (Phase 2), where it gets the evidence standard it needs. Leadership-era scoring (the six years split by chief executive) is likewise a Phase 2 layer; this page names the current chief executive only, from a sourced profile.
Sources
- SEC EDGAR submissions — Filing index; company legal name.
https://data.sec.gov/submissions/CIK0000813672.json - SEC EDGAR company facts — Quarterly financial spine: revenue, gross profit, net income, GAAP diluted EPS, operating cash flow, PP&E capex, buybacks, dividends, diluted shares.
https://data.sec.gov/api/xbrl/companyfacts/CIK0000813672.json - Nasdaq official daily history — Daily closes for the company; SPY (assetclass=etf) saved as raw/nasdaq_spy_raw.json over identical dates.
https://api.nasdaq.com/api/quote/CDNS/historical?assetclass=stocks - Valuation multiples and peer figures — stockanalysis.com (SECONDARY, S&P Global data), fetched Oct 28, 2026; see valuation_label.md in the data pack.
Conventions: earliest-filed value per period, as first reported; cash-flow years-to-date differenced quarter by quarter; EPS never differenced; free cash flow = operating cash flow minus plant-and-equipment spending. This page is a dated snapshot — updates are new versions, never silent edits.