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ADBE vs CDNS

ADBE
Adobe Inc.
BULLISH
Price
$243.08
Market Cap
$99.09B
Sector
Technology
AI Confidence
65%
CDNS
Cadence Design Systems, Inc.
BULLISH
Price
$314.93
Market Cap
$86.01B
Sector
Technology
AI Confidence
88%

Valuation

P/E Ratio
ADBE
14.16
CDNS
81.38
Forward P/E
ADBE
9.22
CDNS
45.98
P/B Ratio
ADBE
8.63
CDNS
16.49
P/S Ratio
ADBE
4.05
CDNS
16.5
EV/EBITDA
ADBE
10.3
CDNS
45.29

Profitability

Gross Margin
ADBE
89.4%
CDNS
85.55%
Operating Margin
ADBE
38.76%
CDNS
35.09%
Profit Margin
ADBE
29.48%
CDNS
20.35%
ROE
ADBE
58.77%
CDNS
21.74%
ROA
ADBE
18.91%
CDNS
11.09%

Growth

Revenue Growth
ADBE
12.0%
CDNS
10.1%
Earnings Growth
ADBE
11.1%
CDNS
20.7%

Financial Health

Debt/Equity
ADBE
0.58
CDNS
0.48
Current Ratio
ADBE
0.91
CDNS
3.05
Quick Ratio
ADBE
0.79
CDNS
2.69

Dividends

Dividend Yield
ADBE
--
CDNS
--
Payout Ratio
ADBE
0.0%
CDNS
0.0%

AI Verdict

ADBE BULLISH

ADBE shows bullish fundamentals based on deterministic rules. Financial strength is stable (F-Score 4/9). Key strengths include strong valuation and growth metrics.

Strengths
Attractive valuation with P/E of 14.2
Strong profitability (29.5% margin)
Strong ROE of 58.8%
Risks
Premium vs Graham Number ($104.3)
CDNS BULLISH

Cadence Design Systems (CDNS) exhibits strong fundamental performance with consistent double-digit earnings growth, industry-leading margins, and robust ROE, all within a high-growth semiconductor design software ecosystem. Despite a premium valuation (P/E 81.4, Forward P/E 46.0), the stock appears reasonably priced relative to its growth trajectory and sector peers, many of whom trade at even higher multiples despite weaker profitability. The company has delivered 22 out of 25 earnings beats over the past six years with accelerating YoY EPS growth of 17.7%, underscoring durable execution and demand tailwinds from AI, HPC, and advanced node adoption. While insider selling raises a cautionary note, analyst consensus remains solidly bullish with a $381.64 target implying 21% upside, and balance sheet strength supports continued reinvestment and resilience.

Strengths
Exceptional profitability with gross margin of 85.55% and operating margin of 35.09%, among the highest in the software and semiconductor tools sector
Strong earnings momentum: 20.7% YoY EPS growth and 17.7% most recent YoY EPS increase, with 22 of last 25 quarters beating estimates
Superior return metrics: ROE of 21.74% significantly exceeds sector average of 25.86% and peer SNPS (6.50%)
Risks
Premium valuation: P/E of 81.38 and Price/Sales of 16.50 are elevated even within a high-multiple sector, increasing sensitivity to growth deceleration
Recent insider selling: $16.84M in sales over last 6 months including CEO and CFO, signaling potential lack of confidence at the top
Limited free cash flow and cash/debt transparency: critical metrics like FCF, total cash, and EV are unavailable, reducing visibility into capital allocation flexibility

Compare Another Pair

ADBE vs CDNS: Head-to-Head Comparison

This page compares Adobe Inc. (ADBE) and Cadence Design Systems, Inc. (CDNS) across key fundamental metrics including valuation ratios, profitability margins, growth rates, financial health indicators, and dividend metrics. Each metric highlights the better-performing stock so you can quickly identify relative strengths and weaknesses.

Our AI engine independently analyzes each company's financials, competitive position, and market conditions to produce a verdict (Bullish, Neutral, or Bearish) along with key strengths and risks. Use this comparison alongside your own research to make informed investment decisions.

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