Cadence stock forecast
Cadence's weighted price is US$330.91 in October 2029, with the bear case at 30%, the base case at 55%, and the bull case at 15%. It hinges on cash growth and execution offsetting a lower valuation multiple.
Where could Cadence's shares be by 2029?
Cadence’s forecast is nearly flat because operating progress is largely offset by a lower valuation multiple. The weighted price is $327.41 in October 2027, a 1% total return including dividends. It is $330.66 in October 2028, a 2% return. It is $330.91 in October 2029, also a 2% return. The final bear-to-bull range is $324.65 to $335.04, against today’s $324.38.
The bear case receives 30%. The base case receives 55%. The bull case receives 15%. The base case therefore carries the forecast, but the narrow range says execution matters more than a major re-rating.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 30 % | 324.95 (+0 %) | 327.40 (+1 %) | 324.65 (+0 %) |
| Base | 55 % | 328.65 (+1 %) | 331.96 (+2 %) | 333.21 (+3 %) |
| Bull | 15 % | 327.80 (+1 %) | 332.41 (+2 %) | 335.04 (+3 %) |
| Weighted | 100 % | 327.41 (+1 %) | 330.66 (+2 %) | 330.91 (+2 %) |
What this means. The weighted row is the average value after giving each case more or less influence based on its probability.
What has to go right for Cadence, and what could go wrong?
The base path grows cash by 10% annually. Its table values are supported by an $8.1 billion backlog, continuing renewals and strong design activity, but acquisition costs and stock compensation restrain conversion. The bear path starts at $1,050 million and grows 3% annually because weaker budgets, delivery friction and integration costs would interrupt growth. The bull path starts at $1,490 million and grows 15% annually because Q2 revenue, Core EDA and IP all showed strong momentum.
The bear case requires weaker design budgets, tougher competition, slower China deliveries and costly integration. It ends at $324.65 after starting at $324.95. Its probability is 30% because cash after stock pay has previously declined, receivables have risen, and export uncertainty remains material.
How much cash does Cadence really make?
Cash from operations was 1,728,781 in 2025. After capital spending of 141,871, free cash flow was 1,586,910. This captures spending on equipment and facilities, but not every cost of staying competitive: R&D salaries already reduce operating cash flow, while acquisitions appear elsewhere.
| 2025 | 2024 | 2023 | 2022 | Jan 2022 | |
|---|---|---|---|---|---|
| Cash from operations | 1,728,781 | 1,260,551 | 1,349,176 | 1,241,894 | 1,100,958 |
| − Capital spending | 141,871 | 142,542 | 102,503 | 124,215 | 66,881 |
| = Free cash flow | 1,586,910 | 1,118,009 | 1,246,673 | 1,117,679 | 1,034,077 |
| − Stock pay | 455,175 | 391,219 | 325,611 | 270,439 | 210,090 |
| = Real free cash flow | 1,131,735 | 726,790 | 921,062 | 847,240 | 823,987 |
| Real free cash flow, % of revenue | 21.4% | 15.7% | 22.5% | 23.8% | 27.6% |
What does an investor pay for Cadence today?
| Today (Oct 16, 2026) | |
|---|---|
| Share price | 324.38 |
| P/E, last 12 months (calculated) | 64.5x |
| P/E, next 12 months (calculated) | 34.0x |
| EV / revenue, last 12 months (calculated) | 15.5x |
| Free cash flow yield (calculated) | 1.8% |
| Real free cash flow yield (calculated) | 1.3% |
What this means. The next 12 months price-to-earnings number uses analysts’ expected profit, so it is an estimate that may be wrong.