3-Year Return on Invested Incremental Capital (3-Year ROIIC %) measures the change in earnings as a percentage of change in investment over 3-year.
Cadence Design Systems's 3-Year ROIIC % for the quarter that ended in Dec. 2025 was 16.61%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for Cadence Design Systems's 3-Year ROIIC % or its related term are showing as below:
XSWX:CDNS's 3-Year ROIIC % is ranked better than 64.6% of 2627
companies
in the Software industry
Industry Median: 5.33
vs XSWX:CDNS: 16.61
Cadence Design Systems (XSWX:CDNS) 3-Year ROIIC % Explanation
Return on Incremental Invested Capital (ROIIC) is an extension of Return on Investment Capital (ROIC). ROIC % tells investors how efficiently that profitability is earned per dollar of company capital. ROIIC narrows the focus even further and shows how profitable each additional unit of capital investment could be. ROIIC % is a more powerful metric than ROIC because it measures how much money the company can generate going forward on future capital investments.
High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
Be Aware
It's important to keep in mind that when tracking ROIIC, the metric is better suited to forecasting the trend of future returns rather than measuring current return on investment.
Cadence Design Systems 3-Year ROIIC % Related Terms
Cadence Design Systems 3-Year ROIIC % Historical Data
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The historical data trend for Cadence Design Systems's 3-Year ROIIC % 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.
For the Software - Application subindustry, Cadence Design Systems's 3-Year ROIIC %, along with its competitors' market caps and 3-Year ROIIC % 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 3-Year ROIIC % vs Software Industry
For the Software industry and Technology sector, Cadence Design Systems's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where Cadence Design Systems's 3-Year ROIIC % 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.
** Annual data of NOPAT and Invested Capital was used to calculate 3-Year ROIIC %.
*** Please be aware that the ROIIC (Return on Invested Capital) calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
Cadence Design Systems (XSWX:CDNS) has a 3-Year ROIIC % of 16.61 as of Dec. 2025. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Cadence Design Systems and its competitors. This is 26% below median its historical median of 22.48. According to the industry distribution chart, Cadence Design Systems ranks #930 out of 2627 companies in the Software industry, placing it in the top 35.4%.
Is Cadence Design Systems' 3-Year ROIIC % too high?
Cadence Design Systems' current 3-Year ROIIC % of 16.61 is 26% below median its 10-year median of 22.48. The Software industry median 3-Year ROIIC % is 5.33. Cadence Design Systems' value of 16.61 is 211.6% above this industry median. Based on the distribution chart, Cadence Design Systems ranks #930 out of 2627 companies in the Software industry, which is above the industry midpoint. 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' 3-Year ROIIC % compare to ?
According to the Software industry distribution chart, Cadence Design Systems ranks #930 out of 2627 companies for 3-Year ROIIC %. This puts Cadence Design Systems in the upper half of its industry. The industry median 3-Year ROIIC % is 5.33. Cadence Design Systems' value of 16.61 is 211.6% above this benchmark. While the company's 10-year median is 22.48 vs. the industry median of 5.33, 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 3-Year ROIIC % for a Software company?
The median 3-Year ROIIC % among Software companies is 5.33, based on 2,627 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year ROIIC % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year ROIIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cadence Design Systems's current 3-Year ROIIC % of 16.61 is 211.6% 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 3-Year ROIIC % mean?
A high 3-Year ROIIC % can signal that a stock is expensive relative to its fundamentals. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Cadence Design Systems and its competitors. For the Software industry, the median 3-Year ROIIC % is 5.33 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cadence Design Systems's current 3-Year ROIIC % is 16.61, which is 26% below median its own 10-year median of 22.48. 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 3-Year ROIIC % of 16.61. The stock's GF Value™ is CHF314.60, compared to a current price of CHF310.65 — trading 1.3% below its estimated fair value. The current 3-Year ROIIC % is 16.61, which is 26% below median its 10-year median of 22.48 and 211.6% above the Software industry median of 5.33. 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 3-Year ROIIC % calculated?
3-Year ROIIC % is calculated from a company's financial statements. For Cadence Design Systems (XSWX:CDNS), the current 3-Year ROIIC % is 16.61 as of Dec. 2025. 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 CHF310.65 is trading 1.3% below its estimated GF Value™ of CHF314.60.
Key valuation signals for XSWX:CDNS:
3-Year ROIIC %: 16.61 (26% below median its 10-year median of 22.48)
GF Value™: CHF314.60 vs. price of CHF310.65 (1.3% below fair value)
Industry Position: 211.6% above the Software median (#930 of 2627)
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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