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CDNS

Cadence Design Systems, Inc.Technology / Software - ApplicationINTACT

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.

Share Price
$289.37
52W: $262.75 - $416.69
DCF Fair Value
$157.08
-84.2% Premium
P/E (TTM)
57.4x
ROIC
21.5%
Operating Margin
28.6%
FCF Yield
2%
Debt / Equity
0.39x
Piotroski Score
8/9
Altman Z-Score
2.92
Market Cap
$79.8B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($157.08)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)
()
Period Range
$ - $
DCF Fair Value
$157.08
MOS Buy Target (-25%)
$117.81
Valuation Overlays:

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price
$289.37
DCF Fair Value
$156.47
-84.9% Premium
$1,610M
$100M$1,610M (Reported)$50,000M
14.3%
-5%10% (Target)35%
4.5%
0%5%20%
9.0%
6%9% (Standard)15% (High Risk)
2.5%
1% (GDP Floor)2.5% (Inflation)4.0%
$1,200M
-$100B CashBalance Sheet+$150B Debt
10-Yr PV of Cash Flows
$18.3B
PV of Terminal Value
$26.1B
Implied Enterprise Value
$44.4B
Implied Equity Value
$43.2B
YearYr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10
Projected FCF ($M)$1,840$2,103$2,404$2,748$3,141$3,282$3,430$3,584$3,746$3,914
Present Value (PV)$1,688$1,770$1,856$1,947$2,041$1,957$1,876$1,799$1,725$1,653

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-444.5% Premium
$53.14

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $5.04BVPS: $24.90
Revised Graham Formula-108.8% Premium
$138.60

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Buffett Owner Earnings1.9% Yield
$5.54 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $1.5BYield: 1.9%

Reverse DCF: Market Growth Expectation

HIGH BARRIER
17.7% CAGR (Next 10 Yrs)

At the current price of $289.37, the market is assuming the business will compound Free Cash Flow at 17.7% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict
ℹ Fair expectations: Requires steady execution.
Autonomous Thesis Underwriting

Surveil CDNS with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Cadence Design Systems, Inc.. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 28.6% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

Frequently Asked Questions: Cadence Design Systems, Inc. (CDNS) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Cadence Design Systems, Inc..

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Cadence Design Systems, Inc. has an estimated DCF intrinsic fair value of $157.08 per share compared to its current market price of $289.37. This represents an estimated 84.2% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $53.14.

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