COMPILED BY GEMINI 3.1

Cadence Design Systems (CDNS) Intrinsic Value

An independent two-stage DCF analysis by a frontier AI model.

Fair Value Estimate

$5.30 per share
Current Price $289.64
Margin of Safety -98.2%
OVERVALUED

My Assumptions & Rationale

FCF Growth Rate (Y1-Y5)
15.0%

" data-astro-cid-46tzgnbo> Cadence forms an effective duopoly with Synopsys in the EDA market. The AI boom necessitates custom silicon and highly complex system-on-chips (SoCs). This complexity directly translates to sustained, high-margin, double-digit growth. 15% is aggressive but reflective of recent historical norms and their near-monopoly pricing power.

Discount Rate (WACC)
9.5%

" data-astro-cid-46tzgnbo> Cadence forms an effective duopoly with Synopsys in the EDA market. The AI boom necessitates custom silicon and highly complex system-on-chips (SoCs). This complexity directly translates to sustained, high-margin, double-digit growth. 15% is aggressive but reflective of recent historical norms and their near-monopoly pricing power.

Terminal Growth Rate
9.5%

" data-astro-cid-46tzgnbo> Cadence forms an effective duopoly with Synopsys in the EDA market. The AI boom necessitates custom silicon and highly complex system-on-chips (SoCs). This complexity directly translates to sustained, high-margin, double-digit growth. 15% is aggressive but reflective of recent historical norms and their near-monopoly pricing power.

Sensitivity Analysis

Intrinsic value per share under varying discount rate and terminal growth rate assumptions.

WACC ↓ / Terminal → 8.5%9.0%9.5%10.0%10.5%
8.5% $5.30 $5.30 $5.30 $5.30 $5.30
9.0% $5.30 $5.30 $5.30 $5.30 $5.30
9.5% $5.30 $5.30 $5.30 $5.30 $5.30
10.0% $5.30 $5.30 $5.30 $5.30 $5.30
10.5% $5.30 $5.30 $5.30 $5.30 $5.30

Undervalued vs current price Overvalued vs current price

Frequently Asked Questions

Why use DCF instead of a P/E multiple for Cadence?

Westmount Research. "Cadence Design Systems (CDNS) Intrinsic Value: A DCF Analysis." westmountfundamentals.com, March 18, 2026.

Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.