CDNS
Cadence Design Systems, Inc. (CDNS)
Last Price$241.7(3.5%)
Market Cap$67.7B
DCF value
$95.9
Overvalued (DCF value)
(60.3%)
Discount Rate
8.5%
Long-Term Growth Rate
4.0%
Stock quality
7/10
Great

CDNS DCF Model

Free Cash Flow to Firm Model
NOPAT Model
Free Cash Flow to Equity Model
Net Income Model
Millions
Billions
Jan'21 ActualJan'22 ActualDec'22 ActualDec'23 ActualDec'24 ActualDec'25 EstimateDec'26 EstimateDec'27 EstimateDec'28 EstimateDec'29 EstimateDec'30 EstimateDec'31 EstimateDec'32 EstimateDec'33 EstimateDec'34 EstimateDec'35 Terminal
% growth
2,682.9
14.8%
2,988.2
11.4%
3,561.7
19.2%
4,090.0
14.8%
4,641.3
13.5%
5,246.8
13.0%
5,860.9
11.7%
6,418.0
9.5%
6,690.5
4.2%
6,972.2
4.2%
7,263.3
4.2%
7,564.1
4.1%
7,874.6
4.1%
8,195.1
4.1%
8,525.8
4.0%
8,866.8
4.0%
645.6
24.1%
779.1
26.1%
1,073.7
30.1%
1,251.2
30.6%
1,350.8
29.1%
1,396.6
26.6%
1,560.0
26.6%
1,708.3
26.6%
1,780.9
26.6%
1,855.8
26.6%
1,933.3
26.6%
2,013.4
26.6%
2,096.0
26.6%
2,181.3
26.6%
2,269.4
26.6%
2,360.1
26.6%
NOPAT
% effective tax rate
602.6
22.5%
705.6
23.6%
872.0
24.5%
1,016.2
24.8%
1,021.4
22.0%
1,056.1
20.1%
1,179.7
20.1%
1,291.8
20.1%
1,346.6
20.1%
1,403.3
20.1%
1,461.9
20.1%
1,522.5
20.1%
1,585.0
20.1%
1,649.5
20.1%
1,716.0
20.1%
1,784.7
20.1%
% of revenue
145.7
5.4%
142.3
4.8%
132.1
3.7%
145.7
3.6%
0.0
0.0%
127.2
2.4%
142.1
2.4%
155.6
2.4%
162.2
2.4%
169.0
2.4%
176.1
2.4%
183.4
2.4%
190.9
2.4%
198.6
2.4%
206.7
2.4%
214.9
2.4%
% of revenue
(94.8)
(3.5%)
(66.9)
(2.2%)
(124.2)
(3.5%)
(102.5)
(2.5%)
(142.5)
(3.1%)
(158.5)
(3.0%)
(177.1)
(3.0%)
(193.9)
(3.0%)
(202.2)
(3.0%)
(210.7)
(3.0%)
(219.5)
(3.0%)
(228.6)
(3.0%)
(237.9)
(3.0%)
(247.6)
(3.0%)
(257.6)
(3.0%)
(267.9)
(3.0%)
(15.4)
(0.6%)
105.8
3.5%
87.5
2.5%
(98.8)
(2.4%)
0.0
0.0%
0.7
0.0%
0.8
0.0%
0.9
0.0%
1.0
0.0%
1.0
0.0%
1.0
0.0%
1.1
0.0%
1.1
0.0%
1.2
0.0%
1.2
0.0%
1.3
0.0%
Free Cash Flow to Firm (FCFF)
% of revenue
638.0
23.8%
886.8
29.7%
967.4
27.2%
960.7
23.5%
878.9
18.9%
1,025.5
19.5%
1,145.5
19.5%
1,254.4
19.5%
1,307.6
19.5%
1,362.7
19.5%
1,419.6
19.5%
1,478.3
19.5%
1,539.0
19.5%
1,601.7
19.5%
1,666.3
19.5%
1,733.0
19.5%
% of FCFF used in calculation
83.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Discount period
0.50
1.50
2.50
3.50
4.50
5.50
6.50
7.50
8.50
9.50
Discount factor
0.96
0.88
0.82
0.75
0.69
0.64
0.59
0.54
0.50
0.46
Discounted FCFF (DFCFF)
817.2
1,013.5
1,022.8
982.6
943.7
906.1
869.6
834.3
800.2
767.2

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CDNS DCF Value

DCF Value Calculation

as of Mar 03, 2025
Sum of DFCFF
% share of EV
8,957.2M
33.6%
Terminal Value (TV)
38.5B
Discounted TV
% share of EV
17.7B
66.4%
Total Debt
2,476.2M
Shares outstanding
279.9M
FX rate
1.0
60.3% overvalued

Equity Value Bridge

CDNS DCF Financials

Revenue
$4,641.3M -> $8,525.8M 6.3% CAGR
Operating Income
$1,350.8M -> $2,269.4M 5.3% CAGR
FCFF
$878.9M -> $1,666.3M 6.6% CAGR

CDNS DCF sensitivity

DCF value
Long-term Terminal growth rate
3.0%
3.5%
4.0%
4.5%
5.0%
WACC
8.0%
$93.0
$100.0
$108.0
$110.0
$110.0
8.5%
$84.0
$90.0
$96.0
$104.0
$107.0
8.5%
$84.0
$90.0
$96.0
$104.0
$107.0
9.5%
$71.0
$75.0
$79.0
$84.0
$89.0
10.0%
$66.0
$69.0
$72.0
$76.0
$81.0
DCF value, undervalued / overvalued
Long-term Terminal growth rate
3.0%
3.5%
4.0%
4.5%
5.0%
WACC
8.0%
(62.0%)
(59.0%)
(55.0%)
(54.0%)
(54.0%)
8.5%
(65.0%)
(63.0%)
(60.0%)
(57.0%)
(56.0%)
8.5%
(65.0%)
(63.0%)
(60.0%)
(57.0%)
(56.0%)
9.5%
(71.0%)
(69.0%)
(67.0%)
(65.0%)
(63.0%)
10.0%
(73.0%)
(71.0%)
(70.0%)
(69.0%)
(66.0%)

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FAQ

What is Cadence Design Systems, Inc. DCF (discounted cash flow) valuation?

As of Mar 03, 2025, Cadence Design Systems, Inc.'s Discounted Cash Flow (DCF) valuation estimates its share price at $95.9. This suggests it may be overvalued by (60.3%) compared to its current price of around $241.7, using a WACC of 8.5% and growth rates of 4.0%.

What is Cadence Design Systems, Inc. WACC?

As of Mar 03, 2025, Cadence Design Systems, Inc.'s Weighted Average Cost of Capital (WACC) is approximately 8.5%.

What is Cadence Design Systems, Inc. Enterprise Value?

As of Mar 03, 2025, Cadence Design Systems, Inc.'s Enterprise Value (EV) is approximately $26.7B. This value reflects the company's total market capitalization plus debt, minus cash and cash equivalents, providing a comprehensive measure of its overall value in the market.