Synopsys vs Cadence: valuation, cash flow, and pairs trade compared

Synopsys and Cadence are two semiconductor companies whose stock values are being compared based on various financial metrics. As of October 2, 2026, Synopsys appears to be the cheaper investment option on a forward valuation and fair value basis, while Cadence appears to be the cheaper option on trailing P/E and EV/EBITDA ratios.

However, neither stock is currently considered a bargain according to these metrics. Prices for both stocks were $488.91 for Synopsys and $348.96 for Cadence, with market capitalizations of $94.01 billion and $96.59 billion respectively. Synopsys has a higher forward P/E ratio of 32.3x compared to Cadence's 43.1x, while Cadence has a lower EV/EBITDA ratio of 44.9x compared to Synopsys's 48.3x.

Both companies also offer a forward cash flow yield of 3.0% for Synopsys and 1.8% for Cadence. The fair value estimates for both stocks are $475.46 for Synopsys, or a 2.7% discount, and $300.10 for Cadence, or a 14.0% discount. The decision on whether to enter a pair trade between these two stocks would require further analysis of their ratio values and upcoming earnings dates. This article was AI-generated with editorial review.