CDNSNEUTRAL

Return on Equity (ROE)

20.7%

Higher than 68% of Technology sector peers

Updated 200h ago

Sector Performance

68th percentile

CDNS

20.7%

Sector Median

8.2%

Sector Avg

2.4%

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Deep Analysis

Return on Equity (ROE) measures how much profit a company generates for each dollar of shareholders' equity — a 20.7% ROE means CDNS earns $0.207 for every $1 of equity invested.

This exceeds the Technology sector median of 7.5%, placing CDNS in the 67th percentile among its peers, indicating above-average profitability relative to the industry. Both the year-over-year and quarter-over-quarter changes are marked as N/A, and there is no historical trend data available for the last eight quarters. With a high current ROE but no trend information, an investor cannot assess whether this performance is improving or deteriorating, creating uncertainty about future sustainability. This combination of a strong level and unclear direction implies a neutral risk-opportunity balance — the company is profitable now, but lacking trend data makes it hard to gauge momentum. This metric supports the overall NEUTRAL verdict: the above-average ROE justifies holding the stock, but the absence of trend data prevents a more bullish or bearish stance.

Frequently Asked Questions

What does the Return on Equity (ROE) tell investors about CDNS?

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.

How is the Return on Equity (ROE) calculated?

Return on Equity (ROE) is calculated as: Net Income / Shareholders' Equity.

How does CDNS's Return on Equity (ROE) compare to its sector?

CDNS's Return on Equity (ROE) of 20.7% compares to a Technology sector median of 8.2%, placing it in the 68th percentile.

Who are CDNS's closest peers by Return on Equity (ROE)?

The closest Technology peers by Return on Equity (ROE) include: AMBA (-12.8%), WIX (-13.8%), SMAR (-17.3%), U (-20.1%), UCTT (-22.5%).

The Formula

Net Income / Shareholders' Equity

Why It Matters

ROE measures how effectively management turns equity into profit. Consistently above 15% is typically considered strong. Negative equity distorts this metric.