Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Cadence Design Systems's annualized net income for the quarter that ended in Mar. 2026 was CHF1,057 Mil. Cadence Design Systems's average shareholder tangible equity for the quarter that ended in Mar. 2026 was CHF681 Mil. Therefore, Cadence Design Systems's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 155.23%.
The historical rank and industry rank for Cadence Design Systems's Return-on-Tangible-Equity or its related term are showing as below:
XSWX:CDNS'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 42.66 Med: 65.42 Max: 155.39
Current: 81.92
During the past 13 years, Cadence Design Systems's highest Return-on-Tangible-Equity was 155.39%. The lowest was 42.66%. And the median was 65.42%.
XSWX:CDNS's Return-on-Tangible-Equity is ranked better than 87.04% of 2470
companies
in the Software industry
Industry Median: 8.77
vs XSWX:CDNS: 81.92
Cadence Design Systems (XSWX:CDNS) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Cadence Design Systems Return-on-Tangible-Equity Related Terms
Cadence Design Systems Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Cadence Design Systems's Return-on-Tangible-Equity can be seen below:
* 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 Return-on-Tangible-Equity Chart
XSWX:CDNS vs : Return-on-Tangible-Equity Comparison
For the Software - Application subindustry, Cadence Design Systems's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Cadence Design Systems's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Cadence Design Systems's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 155.23% mean?
Cadence Design Systems (XSWX:CDNS) has a Return-on-Tangible-Equity of 155.23% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Cadence Design Systems and its competitors. This is 137% above median its historical median of 65.42. Over the past decade, Cadence Design Systems' Return-on-Tangible-Equity has ranged from 42.66 to 155.39. According to the industry distribution chart, Cadence Design Systems ranks #320 out of 2470 companies in the Software industry, placing it in the top 13%.
Is Cadence Design Systems' Return-on-Tangible-Equity too high?
Cadence Design Systems' current Return-on-Tangible-Equity of 155.23% is 137% above median its 10-year median of 65.42. Over the past 10 years, this metric has ranged from a low of 42.66 to a high of 155.39. The Software industry median Return-on-Tangible-Equity is 8.77. Cadence Design Systems' value of 155.23% is 1670% above this industry median. Based on the distribution chart, Cadence Design Systems ranks #320 out of 2470 companies in the Software industry, which is in the top quartile — a strong position relative to peers. 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' Return-on-Tangible-Equity compare to ?
According to the Software industry distribution chart, Cadence Design Systems ranks #320 out of 2470 companies for Return-on-Tangible-Equity. This places Cadence Design Systems in the top 13% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 8.77. Cadence Design Systems' value of 155.23% is 1670% above this benchmark. Historically, Cadence Design Systems' own Return-on-Tangible-Equity has ranged from 42.66 to 155.39 over the past decade. While the company's 10-year median is 65.42 vs. the industry median of 8.77, Cadence Design Systems has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 8.77, based on 2,470 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cadence Design Systems's current Return-on-Tangible-Equity of 155.23% is 1670% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Cadence Design Systems and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 8.77 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cadence Design Systems's current Return-on-Tangible-Equity is 155.23%, which is 137% above median its own 10-year median of 65.42. 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 Return-on-Tangible-Equity of 155.23%. The stock's GF Value™ is CHF314.60, compared to a current price of CHF303.25 — trading 3.6% below its estimated fair value. The current Return-on-Tangible-Equity is 155.23%, which is 137% above median its 10-year median of 65.42 and 1670% above the Software industry median of 8.77. Cadence Design Systems' overall GF Score™ is 99/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Cadence Design Systems (XSWX:CDNS), the current Return-on-Tangible-Equity is 155.23% as of Mar. 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 CHF303.25 is trading 3.6% below its estimated GF Value™ of CHF314.60.
Key valuation signals for XSWX:CDNS:
Return-on-Tangible-Equity: 155.23% (137% above median its 10-year median of 65.42)
GF Value™: CHF314.60 vs. price of CHF303.25 (3.6% below fair value)
Industry Position: 1670% above the Software median (#320 of 2470)
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
Get the complete analysis for XSWX:CDNS
Return-on-Tangible-Equity is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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