Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Current Valuation Ratios
Cadence Design Systems Inc., current price multiples
| Cadence Design Systems Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | CrowdStrike Holdings Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | Software & Services | Information Technology | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||
| Current share price (P) | |||||||||||||||||||||
| No. shares of common stock outstanding | |||||||||||||||||||||
| Growth rate (g) | |||||||||||||||||||||
| Earnings per share (EPS) | |||||||||||||||||||||
| Next year expected EPS | |||||||||||||||||||||
| Operating profit per share | |||||||||||||||||||||
| Sales per share | |||||||||||||||||||||
| Book value per share (BVPS) | |||||||||||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||||||||||
| Price to earnings (P/E) | |||||||||||||||||||||
| Price to next year expected earnings | |||||||||||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||||||||||
| Price to operating profit (P/OP) | |||||||||||||||||||||
| Price to sales (P/S) | |||||||||||||||||||||
| Price to book value (P/BV) | |||||||||||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Cadence Design Systems Inc., historical price multiples
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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).
The valuation ratios demonstrate a generally increasing trend from 2021 to 2023, followed by a moderation in 2024 and a slight shift in 2025. Several ratios peaked in 2023 before experiencing declines or stabilization. This suggests a potential re-evaluation of the company’s worth by the market during the latter period.
- Price to Earnings (P/E)
- The Price to Earnings ratio increased from 53.88 in 2021 to a high of 78.64 in 2023, indicating growing investor confidence or expectations for future earnings. A subsequent decrease to 67.09 in 2024 and a slight increase to 72.92 in 2025 suggests a stabilization, though the ratio remains significantly higher than its 2021 level.
- Price to Operating Profit (P/OP)
- Similar to the P/E ratio, Price to Operating Profit rose from 48.13 in 2021 to 65.43 in 2023. The ratio then decreased to 52.42 in 2024 and experienced a modest increase to 54.20 in 2025. This pattern mirrors the P/E trend, indicating a connection between market valuation and operating profitability.
- Price to Sales (P/S)
- The Price to Sales ratio exhibited the most substantial increase, more than doubling from 12.55 in 2021 to 20.02 in 2023. This indicates a significant premium placed on each dollar of revenue. The ratio then declined to 15.26 in 2024 and remained relatively stable at 15.27 in 2025, suggesting a correction in valuation relative to sales.
- Price to Book Value (P/BV)
- Price to Book Value showed a consistent increase from 13.68 in 2021 to 24.05 in 2023, reflecting a growing market assessment of the company’s net asset value. A notable decrease to 15.15 in 2024, followed by a slight decline to 14.77 in 2025, indicates a reduction in the premium investors are willing to pay for the company’s book value.
Overall, the period from 2021 to 2023 was characterized by increasing valuation multiples, while 2024 and 2025 show signs of moderation or stabilization. The declines observed in 2024 across most ratios warrant further investigation to determine the underlying causes and potential implications for future performance.
Price to Earnings (P/E)
Cadence Design Systems Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Software & Services | ||||||
| P/E Ratio, Industry | ||||||
| Information Technology | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2025 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The price to earnings (P/E) ratio exhibited a generally increasing trend from 2021 to 2023, followed by fluctuations in the subsequent two years. This analysis details the observed patterns in the P/E ratio alongside its constituent components, share price and earnings per share.
- Overall P/E Trend
- The P/E ratio increased from 53.88 in 2021 to a peak of 78.64 in 2023, representing a substantial increase over the period. A subsequent decrease to 67.09 was observed in 2024, followed by a slight increase to 72.92 in 2025. The ratio remained elevated throughout the analyzed period, suggesting a consistently high valuation relative to earnings.
- Share Price Movement
- The share price demonstrated an upward trajectory from $135.21 in 2021 to $300.74 in 2023. A decline to $258.34 occurred in 2024, and the price recovered somewhat to $296.59 in 2025. The share price increases largely contributed to the P/E ratio’s rise between 2021 and 2023.
- Earnings Per Share (EPS) Progression
- Earnings per share increased steadily from $2.51 in 2021 to $4.07 in 2025. The growth in EPS was consistent year-over-year, although the rate of increase slowed between 2024 and 2025. While EPS increased throughout the period, it did not increase at a rate sufficient to offset the share price increases, particularly between 2021 and 2023, contributing to the rising P/E ratio.
- P/E Ratio Drivers
- The P/E ratio’s increase from 2021 to 2023 was primarily driven by the significant increase in share price. The EPS growth, while positive, was not proportionally as large. The decrease in the P/E ratio in 2024 was likely due to the share price decline, despite a continued increase in EPS. The slight increase in the P/E ratio in 2025 reflects a smaller increase in share price relative to EPS.
In summary, the P/E ratio reflects a period of increasing valuation, driven primarily by share price appreciation, with consistent, but comparatively smaller, growth in earnings per share. Recent fluctuations suggest a potential stabilization, but the ratio remains at a relatively high level.
Price to Operating Profit (P/OP)
Cadence Design Systems Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Income from operations (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Software & Services | ||||||
| P/OP Ratio, Industry | ||||||
| Information Technology | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2025 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The Price to Operating Profit (P/OP) ratio for the observed period demonstrates a fluctuating pattern. Initially, the ratio exhibited a slight decrease, followed by a substantial increase, and then a moderation. The share price and operating profit per share both generally increased over the period, influencing the P/OP ratio’s movements.
- Overall Trend
- The P/OP ratio began at 48.13 in 2021, decreased marginally to 47.21 in 2022, then increased significantly to 65.43 in 2023. A subsequent decline to 52.42 was noted in 2024, followed by a slight increase to 54.20 in 2025. This suggests periods of heightened and reduced investor valuation of operating profits.
- Share Price Influence
- The share price increased from US$135.21 in 2021 to US$296.59 in 2025, with a peak of US$300.74 in 2023. The increase in share price contributed to the higher P/OP ratio observed in 2023, even as operating profit per share also rose. The dip in share price in 2024 partially offset the continued growth in operating profit per share, resulting in a lower P/OP ratio for that year.
- Operating Profit per Share Influence
- Operating profit per share consistently increased throughout the period, moving from US$2.81 in 2021 to US$5.47 in 2025. This growth in profitability generally moderated the increases in the P/OP ratio, preventing it from rising as steeply as the share price alone might have suggested. The largest increase in operating profit per share occurred between 2022 and 2023, coinciding with the largest increase in the P/OP ratio.
- Ratio Stabilization
- The P/OP ratio appears to be stabilizing in the later years of the period, fluctuating between 52.42 and 54.20 in 2024 and 2025 respectively. This suggests that investor expectations regarding the value of each dollar of operating profit have become relatively consistent during this timeframe.
In summary, the P/OP ratio reflects the interplay between share price appreciation and growing operating profitability. The significant increase in 2023, followed by a moderation, indicates a dynamic valuation environment.
Price to Sales (P/S)
Cadence Design Systems Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenue (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Software & Services | ||||||
| P/S Ratio, Industry | ||||||
| Information Technology | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
Sales per share = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2025 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The price to sales ratio exhibited a generally increasing trend from 2021 to 2023, followed by a stabilization in the subsequent two years. This analysis details the observed patterns in the provided financial information.
- Price to Sales Ratio (P/S)
- The P/S ratio increased from 12.55 in 2021 to 14.23 in 2022, representing a moderate rise. A more substantial increase was observed between 2022 and 2023, with the ratio reaching 20.02. Subsequently, the P/S ratio decreased to 15.26 in 2024 and remained relatively stable at 15.27 in 2025. This suggests a peak in valuation based on sales in 2023, followed by a correction and subsequent stabilization.
- Share Price and Sales per Share
- The share price demonstrated an overall upward trajectory, increasing from US$135.21 in 2021 to US$296.59 in 2025, although with a dip in 2024 to US$258.34. Sales per share also increased consistently throughout the period, rising from US$10.77 in 2021 to US$19.43 in 2025. The decrease in the P/S ratio in 2024, despite continued growth in both share price and sales per share, indicates that the share price did not increase at the same rate as sales.
The observed stabilization of the P/S ratio in 2024 and 2025, coupled with continued sales growth, may suggest a more reasonable valuation relative to revenue generation during those periods. The initial increase in the P/S ratio could be attributed to increased investor confidence or expectations of future growth, while the later stabilization might reflect a market reassessment.
Price to Book Value (P/BV)
Cadence Design Systems Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Software & Services | ||||||
| P/BV Ratio, Industry | ||||||
| Information Technology | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2025 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Cadence Design Systems Inc. Annual Report.
4 2025 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The price to book value ratio exhibited a generally increasing trend from 2021 to 2023, followed by a decline in the subsequent two years. This indicates a shifting perception of the market value relative to the net asset value of the company.
- Price to Book Value (P/BV) Trend
- The P/BV ratio increased from 13.68 in 2021 to a peak of 24.05 in 2023. This suggests that the market was willing to pay a progressively higher premium for each dollar of net asset value during this period. The ratio then decreased to 15.15 in 2024 and further to 14.77 in 2025, signaling a reduction in this premium.
The share price demonstrated an overall increase between 2021 and 2023, rising from US$135.21 to US$300.74. However, a decrease to US$258.34 was observed in 2024, followed by a partial recovery to US$296.59 in 2025. This price fluctuation influenced the P/BV ratio’s trajectory.
- Book Value per Share (BVPS) Trend
- Book value per share consistently increased throughout the observed period, moving from US$9.88 in 2021 to US$20.08 in 2025. This indicates a steady growth in the net asset value attributable to each share. The increasing BVPS partially offset the impact of the share price fluctuations on the P/BV ratio, particularly in the later years.
The combined effect of the share price and book value per share movements resulted in the observed P/BV trend. The initial increase in the ratio was likely driven by a more substantial increase in share price relative to BVPS. The subsequent decline in the P/BV ratio, despite continued growth in BVPS, suggests that the share price did not increase at the same rate as the underlying net asset value in 2024 and 2025.
- P/BV and Market Sentiment
- A decreasing P/BV ratio can sometimes indicate that the market perceives the company as less favorably, or that the stock may be approaching fair value after a period of growth. The recent decline from the 2023 peak warrants further investigation into potential contributing factors, such as changes in market conditions or company-specific performance expectations.