Cadence Design Systems

CDNS

Software - Application · Technology

Price

$330.11

-34.54 (-9.47%)

Market Cap

$91.05B

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Share count falling — buybacks

−2.0% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 278.9M (2021) → 273.3M (2025)

Cadence Design Systems, Inc. provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification. The company also provides d

Winston Score History

Politician Trades

24 trades / 12mo

11 Congressional buys and 13 sells on CDNS in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+18.7% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+21.8% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$1.8B/ year

↑ Rising (+14% vs prior year)

33.4% of revenue

2.2x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

0.5%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.4B cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

Cadence Design Systems is putting 33% of revenue into R&D and that number is rising. That's 2.2x the sector average. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

95.8%

Premium pricing power — 95.8% gross margin

Operating Margin

29.3%

Excellent — 29.3% operating margin

ROCE

4.6%

Weak — 4.6% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+13.4%

Fast-growing sales (13.4% YoY)

EPS YoY

+8.3%

Earnings growing (8.3% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

136%

Turns 136% of profit into real cash

FCF Margin

25.9%

Converts sales into free cash efficiently (25.9%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.44

Conservative — low debt load (0.44)

Interest Cover

14.45x

Comfortably covers interest (14.4x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

76.6x

Expensive — P/E 76.6

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+41.1

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (76.6 → 35.5)

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Dividends

Not applicable for this business.

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