Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

$24.99

Price to Sales (P/S)
since 2005

Microsoft Excel

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Calculation

Cadence Design Systems Inc., P/S, long-term trends, calculation

Microsoft Excel

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-29), 10-K (reporting date: 2006-12-30), 10-K (reporting date: 2005-12-31).

1 US$

2 Data adjusted for splits and stock dividends.

3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.


The Price-to-Sales (P/S) ratio for the period examined demonstrates significant fluctuation and an overall increasing trend, particularly in the latter half of the observed timeframe. Initially, the ratio exhibited volatility, followed by a period of relative stability, and then a marked increase. A detailed examination of the P/S ratio’s behavior reveals distinct phases.

Early Period (2006-2009)
From 2006 to 2009, the P/S ratio experienced considerable variation. It began at 3.86, peaked at 3.95, then declined sharply to 1.01 in 2009. This decline coincided with a decrease in share price and sales per share, suggesting a potential impact from broader economic conditions or company-specific challenges during that period. The ratio’s low point in 2009 indicates a relatively low valuation compared to sales.
Recovery and Stabilization (2010-2014)
Between 2010 and 2014, the P/S ratio showed a recovery and a period of relative stabilization. The ratio increased from 1.81 to 3.42, with some fluctuation. This suggests a renewed investor confidence and a strengthening of the company’s valuation relative to its sales. The increase in share price during this period contributed to the rising P/S ratio.
Accelerated Growth (2015-2024)
From 2015 onwards, the P/S ratio experienced a period of accelerated growth. The ratio climbed from 3.73 to a peak of 20.02 in 2022. This substantial increase indicates a significant premium placed on the company’s sales, potentially driven by expectations of future growth, improved profitability, or a shift in market sentiment. The ratio then decreased to 15.26 in 2024, potentially indicating a correction or a reassessment of the company’s valuation.
Recent Trends (2023-2026)
The most recent values show a decrease from 20.02 in 2022 to 15.26 in 2024, followed by a slight increase to 15.27 in 2025 and 15.27 in 2026. While still elevated compared to earlier periods, this suggests a potential stabilization or plateauing of the P/S ratio after the rapid growth experienced in prior years. The consistency of the ratio in the last two years suggests a more settled valuation.

Overall, the P/S ratio demonstrates a clear upward trajectory over the long term, with periods of volatility and acceleration. The increasing ratio suggests that investors have been willing to pay a higher price for each dollar of sales generated by the company, particularly in recent years. The recent stabilization warrants continued monitoring to determine if it represents a sustained trend or a temporary pause in the growth of the ratio.


Comparison to Competitors

Cadence Design Systems Inc., P/S, long-term trends, comparison to competitors

Microsoft Excel

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-29), 10-K (reporting date: 2006-12-30), 10-K (reporting date: 2005-12-31).


Comparison to Sector (Software & Services)


Comparison to Industry (Information Technology)

Cadence Design Systems Inc., P/S, long-term trends, comparison to industry (information technology)

Microsoft Excel

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-29), 10-K (reporting date: 2006-12-30), 10-K (reporting date: 2005-12-31).