Stock fact sheet · data as of
Cadence Design Systems, Inc. (CDNS): fair value, margin of safety and Wheel Score
Technology · Software - Application · United States · Blend
Is CDNS undervalued?
At 324.38 (close of 16 Oct 2026), CDNS trades 195% over the GLS average fair value of 109.99, with 0 of 8 models above the price. The stock earns none of the Wheel Score's Value points at this price. That is a statement about price against trailing fundamentals, not about the company's prospects - the Wall Street View and the Growth tab on the Quote page carry the forward numbers.
The 8 models disagree widely: Lynch gives 42.29 while Payback Time gives 183.72. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files CDNS under Blend.
Nine valuation models for CDNS
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 135.06 | -58% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 53.23 | -84% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 124.50 | -62% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 42.29 | -87% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 126.26 | -61% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 158.98 | -51% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 183.72 | -43% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | - | - | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend; no value tonight |
| EPV | 55.89 | -83% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -0.0337 | -100% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 403.27 | +24% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: CDNS passes 4 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is 8.9 out of 10, built from ten years of revenue, earnings, margins, cash flow, share count and returns on capital scored for consistency - a high reading that points to a durable business.
Returns on capital are high - ROIC 13.9%, ROE 20.3%, ROA 10.9% - with debt at 0.45 times equity and a free-cash-flow yield of 1.9%.
Cadence Design Systems, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Product and maintenance 90%, Technology Service 10% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 1/10 on the GLS smart-money scales; the last recorded Congressional buy was on 11 Sep 2026.
| Piotroski F-score | 4 / 9 | ROIC | 13.9% |
|---|---|---|---|
| GLS Moat | 8.9 / 10 | ROE | 20.3% |
| Debt / equity | 0.45 | ROA | 10.9% |
| Free-cash-flow yield | 1.9% | Payout ratio | 0% |
| Institutions | 10 / 10 | Insiders · Congress | 1 · 1 / 10 |
Wheel Score 62: Fair
CDNS scores 62 out of 100 on the Wheel Score (Fair band, 50-64): a usable but unremarkable fit for the wheel strategy. The parts: Value 0/25, Health 9/20, Moat 13/15, Premium 20/20, Stability 20/20. Value (0/25) is where the points are missing.
Implied volatility is 49% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 25,015 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 2.6M shares a day on a market cap of $89.3B, with a beta of 1.13; the Stability part of the Wheel Score gives that 20 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 0 / 25 | -195% margin of safety | |
| Health | 9 / 20 | Piotroski 4/9 | |
| Moat | 13 / 15 | moat 8.9/10 | |
| Premium | 20 / 20 | implied volatility 49% | |
| Stability | 20 / 20 | 2.6M shares/day, $89.3B cap, beta 1.13 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Cadence Design Systems, Inc. reports earnings on 26 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Software - Application
The 12 companies below are the closest to Cadence Design Systems, Inc. by market cap within the Software - Application industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| INTU Intuit Inc. | 330.17 | 478.07 | +31% | 93Prime | $88.2B |
| APP AppLovin Corporation | 279.29 | 342.32 | +18% | 80Prime | $93.8B |
| DDOG Datadog, Inc. | 266.25 | 26.16 | -918% | 56Fair | $95.6B |
| ADBE Adobe Inc. | 251.67 | 363.72 | +31% | 93Prime | $97.9B |
| ADP Automatic Data Processing, Inc. | 285.65 | 204.40 | -40% | 64Fair | $113.2B |
| SNOW Snowflake Inc. | 335.08 | 70.58 | -375% | 45Weak | $116.1B |
| MSTR Strategy Inc | 151.29 | - | - | 45Weak | $60.9B |
| UBER Uber Technologies, Inc. | 69.29 | 134.94 | +49% | 89Prime | $141.5B |
| NOW ServiceNow, Inc. | 148.57 | 76.90 | -93% | 62Fair | $153.6B |
| TEAM Atlassian Corporation | 204.66 | 93.16 | -120% | 45Weak | $51.8B |
| ADSK Autodesk, Inc. | 245.16 | 212.18 | -16% | 77Good | $51.2B |
| WDAY Workday, Inc. | 188.77 | 170.58 | -11% | 76Good | $49.4B |
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Start free See the Sunday ScanQuestions about CDNS
Is CDNS undervalued right now?
No: at 324.38 the stock trades 195% above the GLS average fair value of 109.99 (data as of 16 Oct 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of CDNS and what does it mean?
CDNS scores 62 out of 100 (Fair). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for CDNS?
109.99 per share as of 16 Oct 2026 - the simple average of the 8 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Cadence Design Systems, Inc. report earnings next?
The next earnings report is due on 26 Oct 2026 (after the close), 10 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does CDNS have listed options, and how liquid are they?
Yes. The nightly snapshot found 1,000 listed contracts with 25,015 open interest across all expiries and implied volatility of 49% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.