ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Cadence Design Systems's annualizedNet Income for the quarter that ended in Mar. 2026 was €1,161 Mil.
Cadence Design Systems's average Total Assets over the quarter that ended in Mar. 2026 was €9,568 Mil. Therefore, Cadence Design Systems's annualized ROA % for the quarter that ended in Mar. 2026 was 12.14%.
The historical rank and industry rank for Cadence Design Systems's ROA % or its related term are showing as below:
FRA:CDS'
s ROA % Range Over the Past 10 Years
Min: 9.04 Med: 15.29 Max: 33.95
Current: 11.62
During the past 13 years, Cadence Design Systems's highest ROA % was 33.95%. The lowest was 9.04%. And the median was 15.29%.
FRA:CDS's ROA % is ranked better than 86.62% of 2885
companies
in the Software industry
Industry Median: 1.68
vs FRA:CDS: 11.62
Cadence Design Systems (FRA:CDS) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data.
* 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
* 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.
For the Software - Application subindustry, Cadence Design Systems's ROA %, along with its competitors' market caps and ROA % 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 ROA % vs Software Industry
For the Software industry and Technology sector, Cadence Design Systems's ROA % distribution charts can be found below:
* The bar in red indicates where Cadence Design Systems's ROA % 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 ROA %, the net income of the last fiscal year and the average total assets 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.
ROA % is displayed in the 30-year financial page.
Cadence Design Systems (FRA:CDS) has a ROA % of 12.14% as of Mar. 2026. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Cadence Design Systems and its competitors. This is 21% below median its historical median of 15.29. Over the past decade, Cadence Design Systems' ROA % has ranged from 9.04 to 33.95. According to the industry distribution chart, Cadence Design Systems ranks #386 out of 2885 companies in the Software industry, placing it in the top 13.4%.
Is Cadence Design Systems' ROA % too high?
Cadence Design Systems' current ROA % of 12.14% is 21% below median its 10-year median of 15.29. Over the past 10 years, this metric has ranged from a low of 9.04 to a high of 33.95. The Software industry median ROA % is 1.68. Cadence Design Systems' value of 12.14% is 622.6% above this industry median. Based on the distribution chart, Cadence Design Systems ranks #386 out of 2885 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 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Cadence Design Systems' ROA % compare to ADBE and INTU?
According to the Software industry distribution chart, Cadence Design Systems ranks #386 out of 2885 companies for ROA %. This places Cadence Design Systems in the top 13% of its industry — outperforming the majority of peers. The industry median ROA % is 1.68. Cadence Design Systems' value of 12.14% is 622.6% above this benchmark. Historically, Cadence Design Systems' own ROA % has ranged from 9.04 to 33.95 over the past decade. While the company's 10-year median is 15.29 vs. the industry median of 1.68, 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 ROA % for a Software company?
The median ROA % among Software companies is 1.68, based on 2,885 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cadence Design Systems's current ROA % of 12.14% is 622.6% 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 ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Cadence Design Systems and its competitors. For the Software industry, the median ROA % is 1.68 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cadence Design Systems's current ROA % is 12.14%, which is 21% below median its own 10-year median of 15.29. 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?
Based on GuruFocus' analysis, Cadence Design Systems (FRA:CDS) is currently considered Fairly Valued. The stock's GF Value™ is €324.68, compared to a current price of €322.55 — trading 0.7% below its estimated fair value. The current ROA % is 12.14%, which is 21% below median its 10-year median of 15.29 and 622.6% above the Software industry median of 1.68. 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 ROA % calculated?
ROA % is calculated from a company's financial statements. For Cadence Design Systems (FRA:CDS), the current ROA % is 12.14% 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 (FRA:CDS) Overvalued in 2026?
Based on GuruFocus' analysis, Cadence Design Systems stock appears to be undervalued.
The current stock price of €322.55 is trading 0.7% below its estimated GF Value™ of €324.68.
GuruFocus considers Cadence Design Systems to be Fairly Valued.
Key valuation signals for FRA:CDS:
ROA %: 12.14% (21% below median its 10-year median of 15.29)
GF Value™: €324.68 vs. price of €322.55 (0.7% below fair value)
Industry Position: 622.6% above the Software median (#386 of 2885)
No single metric tells the full story. See the FRA:CDS 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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