In the fast-evolving technology sector, Cadence Design Systems, Inc. (CDNS) and DocuSign, Inc. (DOCU) stand out with innovative software solutions that shape their respective markets. Cadence focuses on integrated circuit design and verification, while DocuSign leads in digital agreement management and e-signature services. Both companies drive digital transformation, making this comparison essential for investors seeking growth and innovation. Let’s explore which offers the most compelling opportunity for your portfolio.
Table of contents
Companies Overview
I will begin the comparison between Cadence Design Systems, Inc. and DocuSign, Inc. by providing an overview of these two companies and their main differences.
Cadence Design Systems, Inc. Overview
Cadence Design Systems, Inc. specializes in software, hardware, and services for integrated circuit design and verification, serving markets such as 5G communications, aerospace, automotive, and healthcare. Founded in 1987 and headquartered in San Jose, CA, Cadence offers advanced platforms for chip verification, digital IC design, and system analysis, positioning itself as a key player in semiconductor design tools with a market cap of $86.4B.
DocuSign, Inc. Overview
DocuSign, Inc. provides electronic signature software and contract lifecycle management solutions that automate agreement processes for businesses globally. Headquartered in San Francisco, CA, and founded in 2003, DocuSign’s offerings include AI-powered analytics and industry-specific cloud products, targeting enterprises and small businesses alike. The company trades with a market cap of $11.4B and focuses on digital transaction management.
Key similarities and differences
Both companies operate in the technology sector and focus on software applications but serve distinct markets and functions. Cadence Design Systems targets semiconductor design and verification with complex hardware-software solutions, whereas DocuSign centers on digital document management and e-signature services. While Cadence emphasizes hardware integration and multi-physics analysis, DocuSign leverages AI to enhance contract workflows, reflecting divergent business models within the software industry.
Income Statement Comparison
This table presents a side-by-side comparison of key income statement metrics for Cadence Design Systems, Inc. and DocuSign, Inc. for their most recent fiscal years.
| Metric | Cadence Design Systems, Inc. (CDNS) | DocuSign, Inc. (DOCU) |
|---|---|---|
| Market Cap | 86.4B | 11.4B |
| Revenue | 4.64B | 2.98B |
| EBITDA | 1.67B | 357M |
| EBIT | 1.47B | 249M |
| Net Income | 1.06B | 1.07B |
| EPS | 3.89 | 5.23 |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Cadence Design Systems, Inc.
Cadence Design Systems has shown consistent growth in revenue, rising from $2.68B in 2020 to $4.64B in 2024, with net income increasing from $591M to $1.06B. Margins have remained stable and favorable, with a gross margin of 86.05% and net margin of 22.74% in 2024. The most recent year saw revenue growth of 13.48%, though net margin dipped slightly by 10.66%.
DocuSign, Inc.
DocuSign experienced revenue growth from $1.45B in 2021 to nearly $3B in 2025, alongside a substantial net income increase from a loss of $243M to a $1.07B profit. Gross margin remained favorable at 79.12%, while EBIT margin was neutral at 8.38%. In 2025, revenue grew modestly by 7.78%, but net margin and EPS surged over 1200% and 1300% respectively, signaling significant profitability improvement.
Which one has the stronger fundamentals?
Both companies present favorable income statement evaluations, with Cadence showing steady, stable growth and strong margins. DocuSign exhibits higher volatility but exceptional recent profitability gains and stronger net margin growth. Cadence’s fundamentals are more consistent, whereas DocuSign’s recent rapid earnings expansion reflects a potentially stronger but less stable financial trajectory.
Financial Ratios Comparison
The table below presents the most recent financial ratios for Cadence Design Systems, Inc. (CDNS) and DocuSign, Inc. (DOCU) based on their latest fiscal year data, providing a snapshot of key performance and financial health metrics.
| Ratios | Cadence Design Systems, Inc. (CDNS) | DocuSign, Inc. (DOCU) |
|---|---|---|
| ROE | 22.58% | 53.32% |
| ROIC | 13.43% | 9.09% |
| P/E | 77.20 | 18.51 |
| P/B | 17.44 | 9.87 |
| Current Ratio | 2.93 | 0.81 |
| Quick Ratio | 2.74 | 0.81 |
| D/E (Debt-to-Equity) | 0.55 | 0.06 |
| Debt-to-Assets | 28.80% | 3.10% |
| Interest Coverage | 17.77 | 128.99 |
| Asset Turnover | 0.52 | 0.74 |
| Fixed Asset Turnover | 7.68 | 7.28 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
Cadence Design Systems, Inc.
Cadence Design Systems shows mostly strong financial ratios with favorable net margin (22.74%), ROE (22.58%), and ROIC (13.43%). Its liquidity ratios are solid, with a current ratio of 2.93 and a quick ratio of 2.74, indicating good short-term financial health. However, valuation metrics like PE (77.2) and PB (17.44) are unfavorable, suggesting the stock may be expensive. The company does not pay dividends, reflecting a possible reinvestment strategy or growth focus.
DocuSign, Inc.
DocuSign presents a mixed ratio profile, highlighted by a very strong ROE of 53.32% and net margin of 35.87%, but weaker liquidity with a current ratio of 0.81. Its leverage is low with a debt-to-assets ratio of 3.1%. Valuation ratios are more moderate, with a PE of 18.51 labeled neutral but PB at 9.87 unfavorable. Like Cadence, DocuSign pays no dividends, likely prioritizing reinvestment and growth over shareholder payouts.
Which one has the best ratios?
Cadence Design Systems has a more favorable overall ratio profile, supported by better liquidity and a balanced leverage position despite higher valuation multiples. DocuSign’s exceptional profitability ratios are offset by weaker liquidity and some unfavorable valuation measures. Both companies do not distribute dividends, focusing on reinvestment, but Cadence’s broader favorable metrics give it a slight edge in ratio strength.
Strategic Positioning
This section compares the strategic positioning of Cadence Design Systems, Inc. and DocuSign, Inc., including market position, key segments, and exposure to disruption:
Cadence Design Systems, Inc.
- Leading software provider in IC design with moderate competitive pressure in tech applications.
- Diverse product lines including IC design, verification, and IP products serving multiple industries.
- Exposure to technological disruption through evolving semiconductor design tools and verification platforms.
DocuSign, Inc.
- Electronic signature market leader facing competitive pressure in digital agreement solutions.
- Focused on e-signature and AI-driven contract lifecycle management for enterprises and SMBs.
- Faces disruption risks linked to AI and automation in contract and agreement management.
Cadence Design Systems, Inc. vs DocuSign, Inc. Positioning
Cadence has a diversified approach targeting multiple tech markets with broad product offerings, while DocuSign concentrates on digital agreements and contract management. Cadence’s breadth offers varied revenue drivers; DocuSign relies on innovation in document workflows and AI.
Which has the best competitive advantage?
Cadence creates value with a declining ROIC trend, indicating some profitability challenges but overall advantage. DocuSign is shedding value but improving profitability, suggesting emerging but not yet sustainable competitive advantage. Both have a slightly favorable moat status.
Stock Comparison
The stock price movements of Cadence Design Systems, Inc. (CDNS) and DocuSign, Inc. (DOCU) over the past 12 months reveal distinct bullish trends with recent deceleration and short-term declines, reflecting shifting trading dynamics and investor sentiment.
Trend Analysis
Cadence Design Systems, Inc. (CDNS) experienced a 4.59% price increase over the past 12 months, indicating a bullish trend with decelerating momentum. The stock showed significant volatility with a high of 373.35 and a low of 232.88, but recently declined by 6.27%.
DocuSign, Inc. (DOCU) recorded a 9.63% gain over the last year, also confirming a bullish trend with deceleration. DOCU’s price ranged between 50.84 and 106.99, yet its recent trend shows a sharper 22.46% decline, reflecting increased short-term selling pressure.
Comparing the two, DOCU delivered the highest market performance with a 9.63% annual gain, outperforming CDNS’s 4.59%, despite both facing recent downward corrections.
Target Prices
Analysts provide a clear consensus on target prices for Cadence Design Systems, Inc. and DocuSign, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Cadence Design Systems, Inc. | 418 | 275 | 381 |
| DocuSign, Inc. | 88 | 70 | 76.86 |
The target consensus for Cadence suggests upside potential above the current price of $317.45, while DocuSign’s consensus at $76.86 exceeds its current price of $56.71, indicating positive analyst expectations for both stocks.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Cadence Design Systems, Inc. (CDNS) and DocuSign, Inc. (DOCU):
Rating Comparison
CDNS Rating
- Rating: B, considered Very Favorable overall
- Discounted Cash Flow Score: 3, Moderate
- ROE Score: 4, Favorable
- ROA Score: 5, Very Favorable
- Debt To Equity Score: 2, Moderate
- Overall Score: 3, Moderate
DOCU Rating
- Rating: B+, considered Very Favorable overall
- Discounted Cash Flow Score: 5, Very Favorable
- ROE Score: 4, Favorable
- ROA Score: 4, Favorable
- Debt To Equity Score: 3, Moderate
- Overall Score: 3, Moderate
Which one is the best rated?
Based strictly on the provided data, DOCU holds a higher rating of B+ compared to CDNS’s B. DOCU also has a superior discounted cash flow score, while other metrics are comparable or slightly favor CDNS.
Scores Comparison
Here is the comparison of the Altman Z-Score and Piotroski Score for Cadence Design Systems, Inc. and DocuSign, Inc.:
CDNS Scores
- Altman Z-Score: 14.51, indicating a strong safe zone.
- Piotroski Score: 7, categorized as strong financials.
DOCU Scores
- Altman Z-Score: 4.43, indicating a safe zone.
- Piotroski Score: 5, categorized as average financials.
Which company has the best scores?
Cadence Design Systems has higher scores in both Altman Z-Score and Piotroski Score, indicating stronger financial stability and performance compared to DocuSign, based on the provided data.
Grades Comparison
The following section compares the recent grades assigned to Cadence Design Systems, Inc. and DocuSign, Inc. by reputable grading companies:
Cadence Design Systems, Inc. Grades
This table summarizes the latest grades from established financial institutions for Cadence Design Systems, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Needham | Maintain | Buy | 2025-12-22 |
| Wells Fargo | Maintain | Overweight | 2025-10-28 |
| Baird | Maintain | Outperform | 2025-10-28 |
| Needham | Maintain | Buy | 2025-10-28 |
| JP Morgan | Maintain | Overweight | 2025-10-28 |
| Oppenheimer | Maintain | Underperform | 2025-10-28 |
| Rosenblatt | Maintain | Neutral | 2025-10-28 |
| Rosenblatt | Maintain | Neutral | 2025-10-22 |
| Needham | Maintain | Buy | 2025-07-29 |
| Loop Capital | Maintain | Buy | 2025-07-29 |
Overall, grades for Cadence Design Systems, Inc. predominantly indicate a positive outlook with multiple buy and outperform ratings, though some neutral and underperform opinions are present.
DocuSign, Inc. Grades
This table presents the recent grades provided by recognized analysts for DocuSign, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-05 |
| Evercore ISI Group | Maintain | In Line | 2025-12-05 |
| UBS | Maintain | Neutral | 2025-12-05 |
| Wells Fargo | Maintain | Equal Weight | 2025-12-05 |
| Piper Sandler | Maintain | Neutral | 2025-12-05 |
| RBC Capital | Maintain | Sector Perform | 2025-12-05 |
| JP Morgan | Maintain | Neutral | 2025-12-05 |
| B of A Securities | Maintain | Neutral | 2025-12-05 |
| Needham | Maintain | Hold | 2025-12-05 |
| Baird | Maintain | Neutral | 2025-12-05 |
DocuSign, Inc.’s grades mostly reflect a cautious stance, with neutral and hold ratings prevailing and no strong buy or outperform recommendations.
Which company has the best grades?
Cadence Design Systems, Inc. holds a stronger consensus with a majority of buy and outperform grades, suggesting higher analyst confidence. DocuSign, Inc. shows more neutral to hold opinions, indicating a more conservative outlook. This may influence investors toward differing risk and return expectations based on grade trends.
Strengths and Weaknesses
Below is a comparison of key strengths and weaknesses for Cadence Design Systems, Inc. (CDNS) and DocuSign, Inc. (DOCU) based on the most recent data.
| Criterion | Cadence Design Systems, Inc. (CDNS) | DocuSign, Inc. (DOCU) |
|---|---|---|
| Diversification | Strong product and maintenance revenue stream ($4.21B in 2024) complemented by Technology Services ($428M); well-diversified offerings in EDA and IC design software | Heavy reliance on subscription revenue ($2.9B in 2025) with limited professional services ($75M); less diversified revenue base |
| Profitability | High net margin of 22.74% and ROE of 22.58%; ROIC at 13.43%, creating value albeit with declining trend | Very high net margin of 35.87% and ROE of 53.32%, but ROIC at 9.09% indicates only neutral value creation; profitability growing |
| Innovation | Strong innovation evidenced by high fixed asset turnover (7.68) and sustained investment in technology | Good innovation indicated by fixed asset turnover (7.28), but still developing competitive advantage |
| Global presence | Established global footprint in semiconductor design market with robust customer base | Expanding global presence in digital agreement solutions but still building scale internationally |
| Market Share | Leader in electronic design automation software with consistent revenue growth | Leading in e-signature market with substantial subscription growth but facing strong competition |
Key takeaway: Cadence excels in diversification and stable profitability despite a slight decline in ROIC, making it a relatively safer value creator. DocuSign shows impressive margin expansion and growing profitability but remains more vulnerable due to its concentrated revenue and evolving competitive moat.
Risk Analysis
Below is a comparative table highlighting key risk factors for Cadence Design Systems, Inc. (CDNS) and DocuSign, Inc. (DOCU) based on the most recent data available:
| Metric | Cadence Design Systems, Inc. (CDNS) | DocuSign, Inc. (DOCU) |
|---|---|---|
| Market Risk | Moderate beta (1.02), technology sector volatility | Moderate beta (0.99), competitive SaaS market |
| Debt level | Moderate debt-to-equity (0.55), manageable leverage | Low debt-to-equity (0.06), strong balance sheet |
| Regulatory Risk | Moderate, with exposure to global tech regulations | Moderate, with emphasis on data privacy and e-signature laws |
| Operational Risk | Complexity in IC design and hardware integration | Dependency on cloud infrastructure and platform stability |
| Environmental Risk | Low direct impact, but increasing pressure on sustainable tech | Low direct impact, focus on digital transaction compliance |
| Geopolitical Risk | Exposure due to global supply chains and markets | Moderate, reliant on international business agreements |
In synthesis, Cadence faces moderate market and debt-related risks tied to its capital-intensive semiconductor design and verification operations. DocuSign’s principal risks lie in regulatory compliance and operational reliance on cloud service stability. Both companies maintain stable financial health, with Cadence showing strong solvency and DocuSign holding a low debt burden, but investors should watch evolving tech regulations and global market dynamics closely.
Which Stock to Choose?
Cadence Design Systems, Inc. (CDNS) shows a favorable income evolution with a 13.48% revenue growth in 2024 and strong profitability metrics, including a 22.74% net margin and 22.58% ROE. Its financial ratios are mostly favorable, though valuations like P/E and P/B appear unfavorable. Debt levels are moderate with a net debt to EBITDA below zero, and the rating is very favorable with a “B” grade.
DocuSign, Inc. (DOCU) presents a positive income trend with a 7.78% revenue growth in 2025 and higher net margin of 35.87% alongside a robust 53.32% ROE. Its financial ratios are slightly favorable overall, supported by low debt and excellent interest coverage, though liquidity ratios are less strong. The company holds a very favorable rating of “B+”.
For investors prioritizing steady financial health and proven value creation, CDNS might appear more attractive given its consistent profitability and moderate debt. Conversely, DOCU’s rapidly growing profitability and strong returns could appeal to investors with a tolerance for evolving competitive positioning and growth focus.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Cadence Design Systems, Inc. and DocuSign, Inc. to enhance your investment decisions:
