Cadence Design Systems (NASDAQ:CDNS) Stock Price Expected to Rise, Needham & Company LLC Analyst Says

Key Points

• Needham raised Cadence Design Systems’ price target to $430 from $400 and reaffirmed its “buy” rating, implying roughly 33% upside from the current price.
• Analyst sentiment remains positive, with a consensus “Moderate Buy” rating and an average target price of $406.41; Citigroup, Robert W. Baird and Bank of America also recently raised their targets.
• Cadence exceeded quarterly expectations, reporting $2.11 in EPS and $1.63 billion in revenue, with revenue up 22% year over year. However, the stock trades at a high valuation, while recent insider activity consisted of planned sales.

Cadence Design Systems (NASDAQ:CDNS - Get Free Report) had its price target boosted by research analysts at Needham & Company LLC from $400.00 to $430.00 in a research note issued on Tuesday, MarketBeat.com reports. The brokerage presently has a "buy" rating on the software maker's stock. Needham & Company LLC's price objective would suggest a potential upside of 33.47% from the company's current price.

CDNS has been the subject of a number of other research reports. Weiss Ratings upgraded shares of Cadence Design Systems from a "hold (c)" rating to a "hold (c+)" rating in a research note on Thursday. Citigroup increased their price objective on shares of Cadence Design Systems from $400.00 to $420.00 and gave the company a "buy" rating in a research report on Tuesday, July 28th. Robert W. Baird increased their price objective on shares of Cadence Design Systems from $420.00 to $440.00 and gave the company an "outperform" rating in a research report on Tuesday. Benchmark restated a "buy" rating on shares of Cadence Design Systems in a report on Tuesday, July 28th. Finally, Bank of America boosted their target price on shares of Cadence Design Systems from $400.00 to $420.00 and gave the stock a "buy" rating in a research note on Tuesday, July 28th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average target price of $406.41.

Cadence Design Systems Price Performance

CDNS stock opened at $322.17 on Tuesday. The business's 50-day moving average is $318.83 and its two-hundred day moving average is $326.92. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.74 and a quick ratio of 1.53. The firm has a market capitalization of $88.72 billion, a P/E ratio of 64.05, a P/E/G ratio of 3.38 and a beta of 1.13. Cadence Design Systems has a 1 year low of $262.75 and a 1 year high of $416.69.

Cadence Design Systems (NASDAQ:CDNS - Get Free Report) last announced its quarterly earnings data on Monday, October 26th. The software maker reported $2.11 EPS for the quarter, topping analysts' consensus estimates of $2.05 by $0.06. Cadence Design Systems had a return on equity of 27.98% and a net margin of 23.60%. The business had revenue of $1.63 billion during the quarter, compared to the consensus estimate of $1.61 billion. During the same period in the previous year, the company posted $1.93 earnings per share. The business's revenue for the quarter was up 22.0% on a year-over-year basis. Analysts anticipate that Cadence Design Systems will post 6.42 earnings per share for the current fiscal year.

Insider Buying and Selling

In related news, VP Paul Cunningham sold 2,000 shares of Cadence Design Systems stock in a transaction that occurred on Thursday, October 15th. The stock was sold at an average price of $324.13, for a total value of $648,260.00. Following the sale, the vice president directly owned 119,612 shares in the company, valued at $38,769,837.56. The trade was a 1.64% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Albert Sangiovanni-Vincentelli sold 1,250 shares of the company's stock in a transaction on Thursday, October 1st. The stock was sold at an average price of $350.07, for a total value of $437,587.50. Following the transaction, the director directly owned 39,544 shares in the company, valued at $13,843,168.08. This represents a 3.06% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 8,960 shares of company stock worth $2,834,139 over the last three months. 0.49% of the stock is owned by company insiders.

Institutional Investors Weigh In On Cadence Design Systems

Institutional investors have recently made changes to their positions in the stock. Van ECK Associates Corp lifted its holdings in shares of Cadence Design Systems by 21.8% during the 2nd quarter. Van ECK Associates Corp now owns 4,889,765 shares of the software maker's stock valued at $1,835,227,000 after acquiring an additional 874,392 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its holdings in Cadence Design Systems by 1.5% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 3,385,655 shares of the software maker's stock worth $1,270,704,000 after buying an additional 48,937 shares in the last quarter. Assenagon Asset Management S.A. increased its position in shares of Cadence Design Systems by 1,097.5% during the third quarter. Assenagon Asset Management S.A. now owns 2,818,141 shares of the software maker's stock worth $930,522,000 after acquiring an additional 2,582,812 shares during the last quarter. Legal & General Group Plc acquired a new position in shares of Cadence Design Systems in the 2nd quarter valued at approximately $702,615,000. Finally, Jupiter Topco LLC bought a new position in Cadence Design Systems during the 2nd quarter valued at $688,746,000. 84.85% of the stock is currently owned by hedge funds and other institutional investors.

Cadence Design Systems News Summary

Here are the key news stories impacting Cadence Design Systems this week:

• Positive Sentiment: Cadence beat third-quarter expectations. The company reported adjusted earnings of $2.11 per share versus the $2.05 consensus estimate and revenue of approximately $1.63 billion versus expectations of $1.61 billion. Revenue rose 22% year over year. Why Is Cadence Design Systems Stock Gaining Tuesday?
• Positive Sentiment: Management raised its full-year 2026 outlook. Cadence now expects revenue growth of about 21%, slightly above its prior forecast, suggesting continued strength in semiconductor and system-design spending. Cadence Design Systems: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Record backlog improved visibility. Backlog reached approximately $8.2 billion, while core EDA, intellectual property and system-design businesses all posted strong growth. Cadence Q3 Earnings Call Highlights
• Positive Sentiment: Cadence expanded its AI strategy. The company introduced the Maestro AI Model Portfolio, including Nvidia-backed models that chipmakers can run in-house, potentially strengthening its position in AI-assisted chip design. Cadence Unveils Nvidia-Backed AI Models
• Positive Sentiment: A $2.5 billion expansion of the share-repurchase authorization provides additional support for earnings per share and signals confidence from the board. Cadence Expands Share Repurchase Authorization
• Neutral Sentiment: Investors will continue monitoring profitability and valuation. Cadence trades at a high earnings multiple, and analysts noted some margin pressure despite strong sales growth. Continued execution will be important to justify the premium valuation.
• Negative Sentiment: Recent insider-trading data showed executives were sellers rather than buyers. These transactions may reflect routine diversification, but they could temper enthusiasm at elevated share prices.

Cadence Design Systems Company Profile

Cadence Design Systems, Inc develops computational software, hardware, and semiconductor intellectual property used to design and verify electronic systems and integrated circuits. Its electronic design automation (EDA) solutions support chip development across areas such as digital and custom IC design, functional verification, emulation, prototyping, and system analysis.

The company also provides semiconductor IP, including processor cores, interconnect technologies, memory interfaces, and other building blocks that help customers develop complex chips.

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