Cadence Design Systems, Inc.

AI-generated fair value estimate for this company.

Method: 10-year unlevered FCF DCF: $1,679M normalized FCF base (TTM); 11% annual FCF growth yrs 1-5 (AI-driven chip-design demand); 8% yrs 6-10; 8.5% discount rate; 3.5% terminal growth; $1,211M net debt ($2,651M debt vs. $1,440M cash); 275.39M shares outstanding.

Reasoning: Cadence is a top-tier EDA software franchise with high recurring revenue and strong FCF conversion benefiting from AI/semiconductor design tailwinds, but its current market multiple (~57x FCF) already prices in sustained high growth well beyond what a disciplined double-digit-growth DCF supports, so intrinsic value comes in meaningfully below the quoted price.