Using the PEG framework with analyst consensus forward EPS growth of 25.0%, Cadence Design Systems, Inc. has a fair value of $201.51 based on NTM EPS (FY2026) of $8.06. The current PEG ratio is 0.68.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
Growth above 25% is capped — hypergrowth may not be sustainable long-term.
| EPS Growth RateForward | 51.2% |
| Adjusted Growth (clamped 8–25%)Clamped | 25.0% |
| Fair P/E | 25.0x |
| NTM EPS (FY2026) | $8.06 |
| Fair Value | $201.51 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $4.06 | — | — |
| FY2026E | $8.06 | +98.5% | 8 |
| FY2027E | $9.28 | +15.1% | 8 |
2Y Forward EPS CAGR: 51.2%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $696.0M | $2.50 | — |
| FY2022 | $849.0M | $3.09 | +23.6% |
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.
| FY2023 | $1.0B | $3.82 | +23.6% |
| FY2024 | $1.1B | $3.85 | +0.8% |
| FY2025 | $1.1B | $4.06 | +5.5% |
4Y Historical EPS CAGR: 12.9%