Cadence Design Systems, Inc. Dossier - Source-backed chat

Cadence Design Systems, Inc.

CDNSNASDAQ

SectorInformation Technology

IndustryApplication Software

Beta (adjusted)1.09

Intrinsic Value $243.35median of 6 methods · middle span $176-$325based on filings through 31 Mar 2026

Market Price $350.73Price as of 1 Oct 2026

OvervaluedIntrinsic value is 31% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $96.6B

Enterprise Value $97.7B

Shares Outstanding 273.4M diluted

Moat Rating Wide

Next Earnings Date26 Oct 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Cadence has strong operating momentum, including 24% year-over-year second-quarter revenue growth, record USD 8.1 billion backlog, expanding adoption across its principal product categories, and a raised fiscal 2026 outlook. Agentic-AI products provide an additional growth vector, with early customer deployments reporting substantial productivity improvements. A Hold recommendation therefore balances compelling execution and revenue visibility against export-control, acquisition-integration, and valuation-anchor uncertainty.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets26 analysts · as of 18 Aug 2026

Low · most bearish analyst$300.00

Mean target$403.67

High · most bullish analyst$470.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$300.0015%

Revenue falls below guidance as export controls, customer-order timing, or weaker hardware and IP demand reduce growth, while integration costs and execution challenges from acquired businesses constrain margins. A material decline in backlog would reinforce this outcome.

Base CaseCentral scenario

$403.6758%

Matches the consensus mean

Cadence delivers within its USD 6.26 billion to USD 6.34 billion fiscal 2026 revenue outlook and maintains non-GAAP operating margin within the 43.75% to 44.75% range. Record backlog and USD 4.2 billion of remaining performance obligations expected within 12 months support near-term visibility, while AI products and the expanded system-design portfolio sustain growth.

Bull CaseUpside scenario

$470.0027%

Cadence exceeds its raised fiscal 2026 outlook as agentic-AI adoption broadens, core EDA demand remains strong, semiconductor IP sustains elevated growth, and the integrated system-design portfolio expands with hyperscalers and leading semiconductor customers.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Second-quarter 2026 revenue increased 24% year over year to USD 1.584 billion, and management raised full-year revenue guidance to USD 6.26 billion to USD 6.34 billion.
Record USD 8.1 billion backlog and USD 4.2 billion of remaining performance obligations expected to convert within 12 months provide substantial forward visibility.
Growth was broad-based in the second quarter: core EDA revenue grew 18%, semiconductor IP grew more than 40%, and System Design and Analysis grew 37% year over year.
ChipStack AI Super Agent entered early deployment with major semiconductor and system companies, with cited customer evaluations reporting verification-effort reductions of up to approximately 10 times.

Key Investment Risks

Export controls, trade restrictions, and continuing obligations associated with the July 2025 DOJ and BIS settlements could affect operations and customer relationships.
The integration and operation of the Hexagon design-and-engineering business and other acquisitions introduce execution risk.
The raised fiscal 2026 outlook creates a higher execution threshold; revenue or margin below the published guidance floors would weaken the operating thesis.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.