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Cadence Design Systems has the Financial Strength Rank of 7.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Cadence Design Systems's Interest Coverage for the quarter that ended in Jun. 2026 was 12.81.
Cadence Design Systems's debt to revenue ratio for the quarter that ended in Jun. 2026 was 0.42.
As of today, Cadence Design Systems's Altman Z-Score is 12.29.
Cadence Design Systems (XSWX:CDNS) Financial Strength Explanation
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Cadence Design Systems has the Financial Strength Rank of 7.
Cadence Design Systems Financial Strength Related Terms
XSWX:CDNS vs ADBE, DDOG, SNOW: Financial Strength Comparison
For the Software - Application subindustry, Cadence Design Systems's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Cadence Design Systems Financial Strength vs Software Industry
For the Software industry and Technology sector, Cadence Design Systems's Financial Strength distribution charts can be found below:
* The bar in red indicates where Cadence Design Systems's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Cadence Design Systems has a Z-score of 12.29, indicating it is in Safe Zones. This implies the Z-Score is strong.
Good Sign:
Altman Z-score of 12.29 is strong.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Cadence Design Systems (XSWX:CDNS) has a Financial Strength of 7 as of Jun. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Cadence Design Systems and its competitors. This is near median its historical median of 7.00. Over the past decade, Cadence Design Systems' Financial Strength has ranged from 7.00 to 7.00.
Is Cadence Design Systems' Financial Strength too high?
Cadence Design Systems' current Financial Strength of 7 is near median its 10-year median of 7.00. Over the past 10 years, this metric has ranged from a low of 7.00 to a high of 7.00. Overall, Cadence Design Systems has a GF Score™ of 99/100, reflecting its overall financial health beyond just this single metric.
How does Cadence Design Systems' Financial Strength compare to ADBE and DDOG?
Cadence Design Systems' Financial Strength of 7 can be compared against companies in the Software industry. Historically, Cadence Design Systems' own Financial Strength has ranged from 7.00 to 7.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Software company?
A good Financial Strength depends on the Software industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Cadence Design Systems and its competitors. Cadence Design Systems's current Financial Strength is 7, which is near median its own 10-year median of 7.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cadence Design Systems stock overvalued right now?
Cadence Design Systems (XSWX:CDNS) has a current Financial Strength of 7. The stock's GF Value™ is CHF321.54, compared to a current price of CHF265.30 — trading 17.5% below its estimated fair value. The current Financial Strength is 7, which is near median its 10-year median of 7.00. Cadence Design Systems' overall GF Score™ is 99/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Cadence Design Systems (XSWX:CDNS), the current Financial Strength is 7 as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Cadence Design Systems (XSWX:CDNS) Overvalued in 2026?
Based on GuruFocus' analysis, Cadence Design Systems stock appears to be undervalued.
The current stock price of CHF265.30 is trading 17.5% below its estimated GF Value™ of CHF321.54.
Key valuation signals for XSWX:CDNS:
Financial Strength: 7 (near median its 10-year median of 7.00)
GF Value™: CHF321.54 vs. price of CHF265.30 (17.5% below fair value)
No single metric tells the full story. See the XSWX:CDNS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Cadence Design Systems is a provider of electronic design automation software, intellectual property, and system design and analysis products. EDA software automates and aids in the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. Cadence offers a portfolio of design IP, as well as system design and analysis products, which enables system-level analysis and verification solutions.
99GF Score
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