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DCF Valuation
Base-case fair value
$93.60
Intrinsic $124.80 · 25% MOS
Current price: $389.60
Base-case summary
Our base-case DCF for Cadence Design Systems Inc (CDNS) projects 10 years of free cash flow growth at 6.7% for years 1–5 and 3.4% for years 6–10, anchored to 6.7% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $1.4B in trailing free cash flow, this produces an intrinsic value of $124.80 per share. A 25% safety margin gives a fair value of $93.60, suggesting the stock is currently 76% overvalued against the $389.60 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$1.4B
Cash & equivalents
$1.4B
Total debt
$177M
Shares outstanding
274M