Cadence Design Systems CDNS

Name: CDNS Crucible Score
Creator: Kaladin Capital Intelligence

UnknownUnknownN/A📅 Scored March 14, 2026

Price at analysis: $281.39

Crucible Score

60.9

C+

Quality × Value Composite

KQI — Quality

79.4

A-

Fundamental Quality Index

KVI — Value

38.2

D-

Valuation Attractiveness Index

Crucible Verdict — CDNS

Cadence Design Systems presents a classic quality-value disconnect, with exceptional fundamentals (88 financial quality, 100% earnings beat rate) trading at a significant discount to fair value. CDNS exhibits strong competitive positioning in electronic design automation software, though diversification remains limited at 53. The 11% upside to base case suggests the market hasn't fully recognized the company's execution consistency.

— Kal, Kaladin Capital Intelligence

◆ KQI Quality Dimensions

Financial Quality

88.1

Growth Profile

80.2

Moat Durability

82.3

Management Effectiveness

71.1

Diversification & Resilience

53.2

Market Position

83.0

Weakest dimension: Diversification & Resilience (53.2)

◆ KVI Value Dimensions

DCF Margin of Safety

58.6

FCF Yield & Cash Returns

27.1

Relative Valuation

18.5

Growth-Adjusted Value

20.6

Historical Valuation

65.9

Macro Context

29.8

◆ DCF Valuation Scenarios

Bear Case

$198.52

Base Case

$312.45

Bull Case

$468.73

Price at Analysis

$281.39

Scenario	Fair Value	Rev CAGR (5yr)	Terminal Margin	WACC
🔴 Bear	$198.52	8.0%	30.0%	9.9%
🟢 Base	$312.45	12.0%	34.0%	9.3%
🟢 Bull	$468.73	15.0%	37.0%	8.7%

Key Assumptions: Revenue growth anchored to 5-year historical CAGR of ~15.4%, with base case moderating to 12% reflecting maturation; operating margins held near historical ~30% range with modest expansion in bull case given software scalability. WACC derived from CAPM with 5.5% ERP and 1.02 beta, yielding ~10% cost of equity; tax rate normalized to ~22% reflecting recent trend toward higher effective rates versus earlier low-tax years. D&A-to-revenue ratio of ~4.4% and capex intensity of ~2.7% maintained consistent with asset-light EDA software model.

◆ Financial Snapshot

Profitability

Gross Margin96.2%

Operating Margin28.2%

Net Margin20.9%

ROIC14.0%

ROE27.5%

Balance Sheet

Balance SheetCR: 2.86

Cash ConversionFCF/EPS: 1.43x

Capital IntensityCapex/Rev: 2.7%

Altman Z-Score11.36 (Safe)

Piotroski F-Score6/9 (Good)

Growth

Revenue CAGR15.4% CAGR

Earnings CAGR12.4% CAGR

Growth ConsistencyCV: 0.27

Segment Breadth2/2 growing (100%)

Quarterly TrendRev↘+6%, Margin↑, WC↓

Earnings CredibilityConsistent Beater

◆ Analyst Consensus & Leadership

Leadership & Governance

CEOLip-Bu Tan · 6 years

CEO Ownership< 1%

Compensation86% performance-based

Insider ActivitySelling

Capital AllocationROIC 14.0% vs WACC 3.7%

Earnings Beat Rate100% (22/22)

◆ Related Companies in Our Universe

Other Unknown companies scored by the Crucible:

ADBE81.8A-NICE80.7A-DECK79.9A-INTU79.9A-EXEL78.3A-MTCH78.2A-TTD78.0B+

Methodology All Scores Crucible Briefs Performance @KaladinCI

Analysis conducted March 14, 2026 based on most recent SEC filings. Updated quarterly, after new SEC filings.

Point-in-time fundamental analysis. Not investment advice. Scores reflect company quality and valuation at time of analysis and may not reflect current market conditions.