In today’s fast-evolving technology landscape, Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) stand out as key players in the software application sector. Both companies share a focus on innovation, catering to industries that rely heavily on design and engineering solutions. Autodesk excels in 3D design and engineering software, while Cadence is a leader in integrated circuit design and verification tools. In this article, I will analyze both companies to help you determine which one presents a more compelling investment opportunity.
Table of contents
Company Overview
Autodesk, Inc. Overview
Autodesk, Inc. is a leading provider of 3D design, engineering, and entertainment software globally. Founded in 1982 and headquartered in San Rafael, California, Autodesk’s mission is to empower designers and engineers by providing innovative software solutions. Its flagship products include AutoCAD for professional drafting, BIM 360 for construction management, and Fusion 360 for integrated design and manufacturing. With a focus on industries such as architecture, engineering, construction, and media, Autodesk serves a diverse client base, leveraging both direct sales and a network of resellers. The company has a market capitalization of approximately $64.8B, reflecting its strong position in the technology sector.
Cadence Design Systems, Inc. Overview
Cadence Design Systems, Inc., established in 1987 and based in San Jose, California, specializes in software, hardware, and services for integrated circuit (IC) design. Cadence’s mission is to accelerate innovation and reduce time-to-market for customers in sectors such as 5G communications, automotive, and aerospace. The company offers a comprehensive suite of products including functional verification tools, digital IC design solutions, and intellectual property (IP) products. Cadence’s market capitalization stands at around $84.9B, highlighting its significant role within the technology landscape and its commitment to advancing semiconductor design.
Key similarities and differences
Both Autodesk and Cadence Design Systems operate within the software application industry, focusing on design and engineering solutions. However, Autodesk primarily targets architectural and construction markets, while Cadence focuses on semiconductor and electronic design automation. Their product offerings differ significantly, with Autodesk emphasizing design software and Cadence concentrating on IC verification and design tools.
Income Statement Comparison
The following table provides a comparative overview of the income statements for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) for their most recent fiscal years.
| Metric | Autodesk, Inc. (ADSK) | Cadence Design Systems, Inc. (CDNS) |
|---|---|---|
| Market Cap | 64.76B | 84.88B |
| Revenue | 6.13B | 4.64B |
| EBITDA | 1.55B | 1.67B |
| EBIT | 1.37B | 1.47B |
| Net Income | 1.11B | 1.06B |
| EPS | 5.17 | 3.89 |
| Fiscal Year | 2025 | 2024 |
Interpretation of Income Statement
In the most recent fiscal year, Autodesk reported a revenue increase to 6.13B, reflecting a growth trend compared to previous years, while Cadence also showed a solid revenue of 4.64B. Autodesk’s net income of 1.11B highlights its ability to improve margins, driven by effective cost controls. Cadence’s net income remained stable at 1.06B, indicating consistent performance. Both companies demonstrated resilience; however, Autodesk outpaced Cadence in revenue growth, indicating a stronger market position, while Cadence’s margins have also remained robust despite lower revenue figures.
Financial Ratios Comparison
The following table provides a comparative look at the most recent revenue and financial ratios for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS).
| Metric | Autodesk (ADSK) | Cadence (CDNS) |
|---|---|---|
| ROE | 42.43% | 22.58% |
| ROIC | 18.01% | 13.43% |
| P/E | 60.20 | 77.20 |
| P/B | 25.54 | 17.44 |
| Current Ratio | 0.68 | 2.93 |
| Quick Ratio | 0.68 | 2.74 |
| D/E | 0.98 | 0.55 |
| Debt-to-Assets | 23.62% | 28.80% |
| Interest Coverage | 0.00 | 17.77 |
| Asset Turnover | 0.57 | 0.52 |
| Fixed Asset Turnover | 21.44 | 7.68 |
| Payout ratio | 0.00% | 0.00% |
| Dividend yield | 0.00% | 0.00% |
Interpretation of Financial Ratios
Autodesk showcases a higher return on equity (ROE) and return on invested capital (ROIC) compared to Cadence, indicating superior profitability in equity utilization. However, Autodesk’s high P/E ratio suggests it may be overvalued compared to Cadence. The current and quick ratios indicate Autodesk’s liquidity position is weaker than Cadence’s, which raises concerns about its short-term financial health. Overall, while Autodesk demonstrates strong profitability metrics, its liquidity and valuation ratios warrant cautious consideration.
Dividend and Shareholder Returns
Both Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) do not pay dividends, reflecting a strategic focus on reinvestment for growth rather than returning cash to shareholders. Autodesk’s lack of dividends, coupled with substantial share buybacks, indicates a commitment to enhancing shareholder value through stock appreciation. Similarly, Cadence emphasizes reinvesting in R&D and acquisitions to drive innovation. This approach may align with long-term value creation, though investors should consider the inherent risks of not receiving immediate returns.
Strategic Positioning
Autodesk, Inc. (ADSK) holds a strong position in the 3D design software market, with notable competition from Cadence Design Systems, Inc. (CDNS) in the software application sector. Autodesk’s market cap of $64.76B and a diverse product offering, including AutoCAD and BIM 360, bolster its competitive edge. Meanwhile, Cadence, with a market cap of $84.88B, focuses on integrated circuit design and verification, representing a technological disruption in the industry. Both companies face competitive pressure to innovate, but their unique offerings help maintain their respective market shares.
Stock Comparison
In this section, I will analyze the stock price movements and trading dynamics of Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) over the past year, highlighting key price fluctuations and trends.
Trend Analysis
Autodesk, Inc. (ADSK)
- Percentage Change: Over the past year, ADSK experienced a price increase of 32.16%, indicating a bullish trend.
- Volatility: The standard deviation of 30.24 suggests a relatively high level of price variability.
- Notable Prices: The stock reached a high of 326.37 and a low of 201.6.
- Recent Trend: However, in the recent period from September 14, 2025, to November 30, 2025, the stock saw a decline of 4.92%, with an acceleration status of deceleration.
Cadence Design Systems, Inc. (CDNS)
- Percentage Change: CDNS’s stock rose by 23.4% over the past year, also reflecting a bullish trend.
- Volatility: The standard deviation of 29.13 indicates significant price fluctuations.
- Notable Prices: The stock peaked at 373.35 and dipped to 232.88.
- Recent Trend: In contrast, from September 14, 2025, to November 30, 2025, CDNS faced a decline of 9.21%, with a trend slope indicating further deceleration.
Both companies have demonstrated strong overall performance over the past year, though recent trends indicate caution due to notable declines in the short term.
Analyst Opinions
Recent analyst recommendations for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) are both rated as “Buy” with a score of 3, indicating a stable outlook. Analysts highlight Autodesk’s strong return on equity and assets, while Cadence shows impressive returns as well. Notable analysts, including those from leading investment firms, emphasize the companies’ solid fundamentals despite current market volatility. The consensus for both stocks remains a “Buy” for 2025, suggesting confidence in their long-term growth potential.
Stock Grades
I have analyzed the latest stock ratings from recognized grading companies for Autodesk, Inc. and Cadence Design Systems, Inc. Here are the findings:
Autodesk, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Baird | maintain | Outperform | 2025-11-26 |
| BMO Capital | maintain | Market Perform | 2025-11-26 |
| Wells Fargo | maintain | Overweight | 2025-11-26 |
| Deutsche Bank | upgrade | Buy | 2025-11-26 |
| Macquarie | maintain | Outperform | 2025-11-26 |
| B of A Securities | maintain | Neutral | 2025-11-26 |
| Barclays | maintain | Overweight | 2025-11-26 |
| Rosenblatt | maintain | Buy | 2025-11-26 |
| Rosenblatt | maintain | Buy | 2025-11-24 |
| Baird | maintain | Outperform | 2025-11-18 |
Cadence Design Systems, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | maintain | Overweight | 2025-10-28 |
| Rosenblatt | maintain | Neutral | 2025-10-28 |
| Needham | maintain | Buy | 2025-10-28 |
| Wells Fargo | maintain | Overweight | 2025-10-28 |
| Oppenheimer | maintain | Underperform | 2025-10-28 |
| Baird | maintain | Outperform | 2025-10-28 |
| Rosenblatt | maintain | Neutral | 2025-10-22 |
| Keybanc | maintain | Overweight | 2025-07-29 |
| JP Morgan | maintain | Overweight | 2025-07-29 |
| Stifel | maintain | Buy | 2025-07-29 |
Overall, I observe a stable trend in grades for both companies, with Autodesk receiving several “Outperform” and “Buy” ratings, indicating positive sentiment among analysts. Cadence Design Systems also maintains a favorable outlook with consistent “Overweight” and “Buy” ratings, despite some “Underperform” assessments. This suggests that both stocks have solid support from analysts, though investors should remain vigilant about market fluctuations and maintain a diversified portfolio to manage risk effectively.
Target Prices
The consensus target prices for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) reflect optimistic analyst expectations.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Autodesk, Inc. | 400 | 343 | 373.4 |
| Cadence Design Systems, Inc. | 418 | 355 | 396.14 |
Analysts expect Autodesk to reach a consensus price of 373.4, significantly higher than its current price of 303.34. Similarly, Cadence has a target consensus of 396.14, above its current price of 311.84. These projections suggest a positive outlook for both companies.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS):
| Criterion | Autodesk, Inc. (ADSK) | Cadence Design Systems, Inc. (CDNS) |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Strong | Very Strong |
| Innovation | High | Very High |
| Global presence | Strong | Strong |
| Market Share | Significant | Significant |
| Debt level | Moderate | Low |
Key takeaways indicate that while both companies possess strong profitability and global presence, Cadence Design Systems excels in innovation and maintains a lower debt level, making it potentially less risky for investors.
Risk Analysis
In the table below, I outline the key risks associated with Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS).
| Metric | Autodesk, Inc. | Cadence Design Systems, Inc. |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Low |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate | Moderate |
Both companies face significant market risk due to industry volatility. Autodesk’s reliance on construction and engineering sectors makes it sensitive to economic fluctuations, while Cadence’s exposure to tech advancements poses operational challenges.
Which one to choose?
When comparing Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS), both companies exhibit solid financial foundations, yet they cater to different market needs. Autodesk has a higher gross profit margin of 90.6% compared to Cadence’s 86.0%, indicating more profitability from its revenue. However, Cadence shows a stronger net profit margin of 22.7%, reflecting effective cost management. In terms of stock trends, Autodesk’s price has increased by 32.2% over the past year, while Cadence’s has grown by 23.4%. Analyst ratings for both companies are similar, with a “B” rating.
For growth-focused investors, Autodesk may be preferable due to its higher growth potential, while those valuing stability might lean towards Cadence, given its stronger net margins. However, investors should be cautious of competition and market dependence risks affecting both firms.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Autodesk, Inc. and Cadence Design Systems, Inc. to enhance your investment decisions:
