CADENCE DESIGN SYSTEMS, INC. vs SAP SE, two Software stocks. A side-by-side on valuation, growth, margins, returns, and what each price is betting.
Both prices bet on software staying essential; they disagree about which kind. Cadence at 87.8 times earnings is priced as critical infrastructure for the AI chip boom, its EDA tools the one toll every new design pays; SAP at 23.3 times is priced as an installed-base annuity mid-way through a cloud transition. The economics are closer than the multiples, operating margins of 29.3% and 26.1%, returns on assets near 10% each, both debt-free. The cash split is decisive: SAP yields 5.5% in free cash against Cadence's 1.4%. Paying nearly four times the multiple for Cadence buys exposure to design starts instead of maintenance contracts. That is the entire trade.
Comparison updated 2026-07-10.
| Metric | CDNS | SAP |
|---|---|---|
| Price | $376.60 | $155.23 |
| Market cap | $103.1B | $181.0B |
| Sector | Software | Software |
| Stage | Mature | Mature |
| P/E | 87.8 | 23.3 |
| P/B | 15.71 | 3.69 |
| P/S | 18.65 | 4.52 |
| EV/EBITDA | 61.8 | 16.5 |
| Revenue growth | +13.8% | +8.1% |
| Gross margin | — | 72.9% |
| Operating margin | 29.3% | 26.1% |
| Net margin | 21.2% | 19.9% |
| Return on equity | 17.9% | 16.3% |
| Return on assets | 9.7% | 10.4% |
| Return on invested capital | 18.7% | 15.2% |
| FCF yield | 1.4% | 5.5% |
| Debt / equity | 0.00 | 0.00 |
| Current ratio | 1.47 | 1.16 |
| Altman Z (solvency) | 7.54 | 5.92 |
| 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.