As we navigate the evolving landscape of technology, two companies stand out in the software application industry: Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS). Both firms are at the forefront of innovation, offering solutions that cater to design and engineering sectors, which places them in direct competition. While Autodesk specializes in 3D design and engineering software, Cadence focuses on integrated circuit design and verification. In this article, I will analyze these companies to help you determine which one presents the most compelling investment opportunity.
Table of contents
Company Overview
Autodesk, Inc. Overview
Autodesk, Inc. is a leader in 3D design, engineering, and entertainment software. Established in 1982 and headquartered in San Rafael, California, Autodesk offers a diverse range of software solutions, including AutoCAD, BIM 360, and Fusion 360, catering to industries such as construction, manufacturing, and media. With a mission to empower users to design and create better solutions, Autodesk operates with a market capitalization of approximately $62.4B. The company is known for its innovative cloud-based services, enhancing collaboration and efficiency in design processes.
Cadence Design Systems, Inc. Overview
Cadence Design Systems, Inc. specializes in electronic design automation (EDA) software and services, serving a wide array of markets including automotive, aerospace, and telecommunications. Founded in 1987 and based in San Jose, California, Cadence is focused on providing tools for integrated circuit (IC) design and verification, with a market cap around $81.8B. Their software solutions, such as JasperGold and Xcelium, are pivotal for modern chip design, emphasizing accuracy and speed in the verification process, ultimately helping clients bring innovative products to market.
Key Similarities and Differences
Both Autodesk and Cadence operate within the software application industry, emphasizing design and engineering solutions. However, Autodesk focuses on 3D design across various sectors, while Cadence specializes in EDA tools for electronic circuit design. Autodesk’s offerings are broader in creative applications, whereas Cadence’s tools are more technical, targeting semiconductor and electronic design verification.
Income Statement Comparison
Below is a comparison of the most recent income statements for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS). This table highlights key financial metrics to assist investors in evaluating the performance of these companies.
| Metric | Autodesk, Inc. (ADSK) | Cadence Design Systems, Inc. (CDNS) |
|---|---|---|
| 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 |
Interpretation of Income Statement
In the most recent year, Autodesk (ADSK) demonstrated robust revenue growth of 12.7% year-over-year, while Cadence (CDNS) experienced a more modest increase of 13.5%. Both companies maintained stable operating margins, with Autodesk showing a slight improvement in EBITDA margin. However, Autodesk’s growth rate indicates a possible slowdown compared to previous years, suggesting a need for careful monitoring. Despite this, both firms remain profitable, with earnings per share (EPS) reflecting healthy performance, underscoring their strong positions in the market.
Financial Ratios Comparison
In this section, I present a comparative analysis of the most recent financial ratios for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS). This will help investors evaluate the financial health and performance of these companies.
| 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 | 0 |
| Dividend yield | 0% | 0% |
Interpretation of Financial Ratios
Autodesk exhibits strong profitability metrics, notably a high ROE and ROIC, indicating effective capital utilization. However, its low current and quick ratios suggest liquidity concerns, which may pose risks in meeting short-term obligations. In contrast, Cadence shows a more favorable liquidity position with a robust current ratio and strong interest coverage, indicating solid financial health. However, its higher P/E ratio suggests that it may be overvalued relative to earnings. Overall, both companies have strengths and weaknesses that investors should carefully consider.
Dividend and Shareholder Returns
Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) do not pay dividends, which is common for companies in their growth phases. Autodesk focuses on reinvesting profits into R&D and expanding its market presence. Similarly, Cadence prioritizes growth initiatives over shareholder returns. Both companies engage in share buybacks, indicating a commitment to enhancing shareholder value. This strategy supports long-term value creation, though it carries risks if growth does not materialize as expected.
Strategic Positioning
Autodesk, Inc. (ADSK) holds a market cap of $62.4B and is a leader in the 3D design software market with strong offerings in engineering and construction. Meanwhile, Cadence Design Systems, Inc. (CDNS) boasts a slightly higher market cap of $81.8B, focusing on integrated circuit design and verification. Both companies face competitive pressure from emerging technologies and shifting market demands, which necessitates continuous innovation to maintain their market shares. Technological disruption remains a constant threat, requiring both firms to adapt swiftly to market changes.
Stock Comparison
Over the past year, Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) have displayed notable stock price movements, reflecting varying trading dynamics and market sentiments that are essential for potential investors to consider.
Trend Analysis
Autodesk, Inc. (ADSK) Analyzing ADSK’s performance over the past year, the stock has experienced a price increase of 19.43%. This indicates a bullish trend overall, although the trend is currently showing deceleration. The highest price reached was 326.37, while the lowest was 201.6. In the recent period from September 7, 2025, to November 23, 2025, the stock saw a decline of 10.9%. The volatility during this recent period was evident, with a standard deviation of 11.43.
Cadence Design Systems, Inc. (CDNS) For CDNS, the stock has risen by 10.36% over the past year, also reflecting a bullish trend. Similar to ADSK, this stock is exhibiting deceleration. The highest price noted was 373.35, while the lowest was 232.88. However, during the recent period from September 7, 2025, to November 23, 2025, CDNS experienced a decline of 14.37%, accompanied by a standard deviation of 18.44, indicating notable volatility.
In summary, both stocks have experienced overall bullish trends over the past year, but recent declines highlight the importance of cautious risk management for investors considering these equities.
Analyst Opinions
Recent analyst recommendations for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) show a consensus rating of “Buy.” Analysts emphasize Autodesk’s strong return on equity and assets, alongside a solid overall score of 3. Similarly, Cadence has a commendable return on assets, which bolsters its rating. Notable analysts have highlighted the companies’ potential for growth, making them attractive options for investors seeking reliable additions to their portfolios. The optimistic outlook suggests both stocks could perform well in the current market environment.
Stock Grades
In this section, I present the latest stock grades for Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS), showing how analysts view their potential.
Autodesk, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Baird | maintain | Outperform | 2025-11-18 |
| Citigroup | maintain | Buy | 2025-11-14 |
| RBC Capital | maintain | Outperform | 2025-10-06 |
| HSBC | upgrade | Buy | 2025-10-01 |
| Morgan Stanley | maintain | Overweight | 2025-09-02 |
| Citigroup | maintain | Buy | 2025-09-02 |
| Mizuho | maintain | Outperform | 2025-08-29 |
| Macquarie | maintain | Outperform | 2025-08-29 |
| Keybanc | maintain | Overweight | 2025-08-29 |
| Stifel | maintain | Buy | 2025-08-29 |
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, both Autodesk and Cadence Design Systems maintain strong ratings from multiple reputable analysts, indicating a generally positive outlook. Autodesk has consistently received “Outperform” and “Buy” ratings, while Cadence shows a mix of “Overweight” and “Buy” ratings, with a few “Neutral” and “Underperform” grades that investors should consider when making decisions.
Target Prices
The consensus target prices for Autodesk, Inc. and Cadence Design Systems, Inc. indicate positive expectations from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Autodesk, Inc. (ADSK) | 385 | 343 | 372.92 |
| Cadence Design Systems, Inc. (CDNS) | 418 | 355 | 396.14 |
Analysts expect Autodesk, Inc. to reach a consensus target price of 372.92, compared to its current price of 290.8, while Cadence Design Systems, Inc. has a consensus of 396.14 against its current price of 300.58. Both indicate potential for significant upside.
Strengths and Weaknesses
In this section, I will outline the strengths and weaknesses of Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) based on the most recent data available.
| Criterion | Autodesk, Inc. (ADSK) | Cadence Design Systems, Inc. (CDNS) |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Strong (Net Margin: 18.1%) | Strong (Net Margin: 22.7%) |
| Innovation | High | High |
| Global presence | Strong | Strong |
| Market Share | Significant | Significant |
| Debt level | Moderate (Debt/Equity: 0.976) | Low (Debt/Equity: 0.553) |
Key takeaways indicate that both companies exhibit strong profitability and innovation capabilities. However, Cadence shows a lower debt level, suggesting a more conservative financial position, which may appeal to risk-averse investors.
Risk Analysis
Understanding the potential risks associated with investments in Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS) is crucial for making informed decisions.
| 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 notable risks, particularly market volatility and operational challenges. For instance, Autodesk’s higher market risk, attributed to its beta of 1.477, suggests greater sensitivity to market fluctuations, while Cadence’s lower environmental risk indicates less exposure to regulatory complexities. Understanding these dynamics helps in better risk management and investment strategy formulation.
Which one to choose?
When comparing Autodesk, Inc. (ADSK) and Cadence Design Systems, Inc. (CDNS), both companies exhibit strong fundamentals, reflected in their solid profit margins and robust growth prospects. Autodesk shows a higher net profit margin of 18.14% compared to Cadence’s 22.74%, indicating better profitability. However, Autodesk’s higher price-to-earnings (P/E) ratio of 60.2 suggests a premium valuation. In terms of market capitalization, Cadence stands at approximately $81B vs. Autodesk’s $67B, which may provide a larger safety net for investors.
Analysts rate both companies with a “B” grade, indicating a balanced outlook. Investors focused on growth may prefer Autodesk for its potential upside, while those prioritizing stability may favor Cadence due to its stronger cash position and lower debt levels.
However, both companies face risks related to competition and market volatility.
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:
