Cadence Design (CDS) AI Stock Analysis

Cadence Design

(XETRA:CDS)

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Positive Factors

Recurring platform modelCadence’s subscription, maintenance, and support model provides recurring revenue and better visibility than purely transactional software sales. Deep integration across design, verification, signoff, and packaging workflows also raises switching costs, supporting renewals and customer expansion.

Negative Factors

Export-control exposureCadence’s financial outlook depends partly on export-control rules remaining broadly unchanged, making international customer access and revenue assumptions vulnerable to regulatory shifts. A materially tighter regime could reduce demand, delay transactions, or complicate serving affected customers.

Cadence Design (CDS) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 90.30B
Dividend Yield: ―
Average Volume (3M): 230
Price to Earnings (P/E): 64.8
Beta (1Y): 0.57
Revenue Growth: 11.80%
EPS Growth: 22.60%
Country: Germany
Employees: 13,800
Sector: General
Sector Strength: 55
Industry: Software - Application

Cadence Design Business Overview & Revenue Model

Company Description

Cadence Design Systems, Inc. operates globally, delivering a comprehensive suite of solutions that includes software, specialized hardware, professional services, and pre-designed integrated circuit (IC) building blocks. The company's robust function...

Cadence Design Earnings Call Summary

Earnings Call Date:Oct 25, 2026(Q3-2026)|% Change Since:0.34%|Next Earnings Date:Feb 22, 2027

Earnings Call SentimentPositive

The call was strongly positive, with record backlog, 22% Q3 revenue growth, raised 2026 guidance, broad-based product growth, accelerating Agentic AI adoption, and strong customer and hardware momentum. The main caveats were the sequential moderation in recurring revenue growth, higher hardware inventory, hardware quarter-to-quarter lumpiness, the near-term margin effect of the Hexagon D&E integration, and the outlook's export-control assumption.

Positive Updates

Record Backlog and Raised Full-Year Outlook

Backlog reached a record $8.2 billion, reflecting strong bookings and growing customer demand. Cadence raised its 2026 revenue outlook to 21% growth and increased its EPS outlook by $0.30 to $8.40.

Negative Updates

Recurring Revenue Growth Moderated Sequentially

Recurring revenue growth was 18% year over year in Q3, compared with 20% cited for the prior quarter. Management said the comparison was affected by specific China revenue movements, with that revenue not present this year.

Company Guidance

Cadence raised its revenue outlook for the year to 21% growth and its EPS outlook by $0.30 to $8.40; for 2026, it expects revenue in the range of $6.387 billion to $6.417 billion, GAAP operating margin in the range of 28.2% to 29.2%, Non GAAP operating margin in the range of 44.2% to 45.2%, GAAP EPS in the range of $4.84 to $4.90, Non-GAAP EPS in the range of $8.37 to $8.43, operating cash flow of approximately $2 billion, and to use more than 50% of its free cash flow to repurchase Cadence shares in 2026; at the midpoint, it expects revenue growth of 21%, operating margin of 44.7%, and EPS of $8.40. For Q4, it expects revenue in the range of $1.695 billion to $1.725 billion, GAAP operating margin in the range of 30% to 31%, Non GAAP operating margin in the range of 44% to 45%, GAAP EPS in the range of $1.23 to $1.29, and non GAAP EPS in the range of $2.19 to $2.25, assuming export control regulations that exist today remain substantially similar for the remainder of the year.

Cadence Design Risk Analysis

Cadence Design disclosed 43 risk factors in its most recent earnings report. Cadence Design reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

0 New Risks

Cadence Design Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

DE:CDS against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TYL	73Outperform	$15.68B	49.16	10.25%	―	7.96%	9.43%
ADSK	71Outperform	$52.17B	32.12	52.50%	―	18.70%	59.41%
SNOW	71Outperform	$107.99B	-96.25	-53.56%	―	32.04%	23.46%
HUBS	58Neutral	$11.71B	82.99	7.75%	―	21.08%	―
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
MSTR	53Neutral	$55.08B	-2.27	-25.97%	―	7.79%	-742.51%

* General Sector Average

Performance Comparison

DE:CDS and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:CDS	Cadence Design Systems	294.60	6.05	2.10%
ADSK	Autodesk Inc	249.61	-51.25	-17.03%
MSTR	Strategy Incorporated	130.51	-116.48	-47.16%
TYL	Tyler Technologies	394.30	-75.41	-16.05%
HUBS	HubSpot, Inc.	234.87	-237.12	-50.24%
SNOW	Snowflake, Inc.	306.08	40.66	15.32%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Cadence Design AI Stock Analysis