MeritValue

CADENCE DESIGN SYSTEMS INC

CDNSdata completeness 88%18 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

CADENCE DESIGN SYSTEMS INC earns about 47% on invested capital, far above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $39.48 and $108.49 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2022FY 2023FY 2024FY 2025
Revenue$2.99B1$3.56B2$4.09B3$4.64B3$5.3B3
Net income$696M4$849M5$1.04B6$1.06B6$1.11B6
Operating cash flow$1.1B7$1.24B8$1.35B9$1.26B9$1.73B9
Capital expenditure$65.3M10$123.2M11$102.3M12$142.5M12$141.9M12
Free cash flow (derived)$1.04B7$1.12B8$1.25B9$1.12B9$1.59B9
Total debt—————
Cash & equivalents$1.09B13$882.3M14$1.01B15$2.64B16$3B16
Diluted shares278.9M275.0M272.7M273.8M273.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$200.29
your share of equity
Profit it earned you last year
$40.57
Free cash flow it threw off
$58.06
Debt you’d be carrying
—

10 shares is a claim on $200.29 of net worth that earned you $40.57 and generated $58.06 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
47% avg · 5y
FY22 43%FY22 47%FY23 45%FY24 55%FY25 48%

It earned about 47% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−2% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $39.48 and $108.49 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$108.49
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth6.4%
  • fcfBase$1.25B
DCF · Growth Exit 5Y
$96.82
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth6.4%
  • fcfBase$1.25B
Earnings Power Value
$39.48
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.04B
  • growthAssumed0.0%
Graham Number
$42.77
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years6.4%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $96.82
The three cases
Bear0.0%$76.16
Base6.4%$96.82
Bull11.4%$116.64

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 6.4%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2022-01-01 · accession 0000813672-24-000034 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000813672-25-000024 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000813672-26-000016 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-01-01 · accession 0000813672-24-000034 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000813672-25-000024 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000813672-26-000016 (NetIncomeLoss)
  7. 10-K · period ending 2022-01-01 · accession 0000813672-24-000034 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000813672-25-000024 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000813672-26-000016 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-01-01 · accession 0000813672-24-000034 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000813672-25-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000813672-26-000016 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-01-01 · accession 0000813672-23-000011 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0000813672-24-000034 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000813672-25-000024 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0000813672-26-000016 (CashAndCashEquivalentsAtCarryingValue)