Cadence Design Systems, Inc. ranks below the peer group median, with a split structural profile: strong growth, but weak profitability and valuation. The market setup is mixed, without a clear directional signal. Recent price action is broadly in line with the structural positioning.
Peer-relative scores, weakest to strongest
Cadence Design Systems develops software and hardware for electronic design automation, serving the semiconductor industry.
CDNS is positioned as an innovation leader with AI focus above peers. The market prices every AI initiative as further proof of technological dominance, supporting a valuation premium even as 1Y volatility stands at 38.5%—well above the sector median. This means each new development or minor disappointment is quickly reflected in the share price, with operating margin at 34.2% (well above software sector median) and volatility at 38.5% (notably higher than peer median). CDNS stands out through early AI integration and partnerships with TSMC and NVIDIA, making each product update a test of its leadership. The market prices in an innovation premium that depends on continuous AI progress. A disappointing AI product cycle or a pause in innovation can abruptly compress the premium.
Break down CDNS's position across all dimensions with the full interactive tool.
This analysis is rule-based and descriptive. Peer-relative scores are derived from functional peer group comparisons using publicly available financial data. Scores reflect structural positioning only and do not constitute investment advice, a buy or sell recommendation, or a forecast of future performance. AssetNext peer scores are recalculated periodically as new data becomes available.
AssetNext scores reflect each company's structural position within its functional peer group — not a ranking against all stocks simultaneously. Peers are identified by similarity across eight financial dimensions, including revenue growth trajectory, margin structure, capital intensity, and earnings stability. A score of 75 means the company ranks in the top quartile within its own peer group, not the entire market.
Four dimension scores drive the overall peer score: Growth (revenue trajectory and expansion dynamics), Quality (margin structure and capital efficiency), Valuation (peer-relative pricing on standard multiples), and Stability (earnings consistency and financial predictability). Each dimension is scored 0–100 relative to the peer group, then combined into an overall peer score using equal weighting.
Because scores are peer-relative, the same company can have slightly different scores in different index universes. On comparison pages, both companies are shown within their shared peer universe wherever possible — so the scores are directly comparable. The peer basis is stated on each score card.
Scores are recalculated periodically as underlying financial data is updated. All analysis is descriptive and rule-based — AssetNext describes structural realities and never issues buy, sell or hold recommendations.