CADENCE DESIGN SYSTEMS, INC. vs ServiceNow, Inc., two Software stocks. A side-by-side on valuation, growth, margins, returns, and what each price is betting.
ServiceNow keeps about 75 cents of gross profit on every sales dollar, the kind of software gross margin Cadence does not disclose here, yet by the time the bills are paid ServiceNow operates at only 13% while Cadence runs 29%. The reading is straightforward: a high gross margin tells you the product is cheap to deliver, not that the company is efficient once sales and research are counted, and ServiceNow spends heavily to grow. Cadence converts more of its revenue to the bottom line, a 21% net margin to ServiceNow's 13%, but ServiceNow turns far more price into free cash, a 4.4% yield to Cadence's 1.4%. The market prices these similarly sized companies apart on that: Cadence near 90 times earnings, ServiceNow near 60. Cadence is paid up for what it keeps, ServiceNow for the cash it throws off.
Comparison updated 2026-06-15.
| Metric | CDNS | NOW |
|---|---|---|
| Price | $384.25 | $107.68 |
| Market cap | $105.2B | $112.0B |
| Sector | Software | Software |
| Stage | Mature | Growth |
| P/E | 89.6 | 64.1 |
| P/B | 16.03 | 9.55 |
| P/S | 19.02 | 8.02 |
| EV/EBITDA | 63.0 | 40.8 |
| Revenue growth | +13.8% | +21.7% |
| Gross margin | — | 75.1% |
| Operating margin | 29.3% | 13.3% |
| Net margin | 21.2% | 12.6% |
| Return on equity | 17.9% | 15.0% |
| Return on assets | 9.7% | 7.2% |
| Return on invested capital | 18.7% | 9.9% |
| FCF yield | 1.4% | 4.1% |
| Debt / equity | 0.00 | 0.13 |
| Current ratio | 1.47 | 0.84 |
| Altman Z (solvency) | 7.54 | 6.20 |
| Piotroski F (quality) | 6 / 9 | 7 / 9 |
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The stronger value is highlighted per metric where one is strictly better on that single number; it is not an overall verdict on either company. For informational and research purposes only. Not investment advice. Not a recommendation to buy, sell, or hold any security. boothcheck is not a registered investment adviser. Past performance does not guarantee future results.