Cadence Design Systems (NASDAQ:CDNS) Stock Price Expected to Rise, Robert W. Baird Analyst Says

Key Points

• Robert W. Baird raised Cadence Design Systems’ price target to $440 from $420 and maintained an “outperform” rating, implying approximately 36.6% upside from the current price.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and average target of $406.41; 19 analysts rate the stock Strong Buy or Buy, while three recommend Hold.
• Cadence exceeded quarterly expectations with $2.11 in EPS and $1.63 billion in revenue, up 22% year over year. However, the stock’s elevated valuation and recent insider selling remain considerations for investors.

Cadence Design Systems (NASDAQ:CDNS - Get Free Report) had its price objective boosted by analysts at Robert W. Baird from $420.00 to $440.00 in a research note issued on Tuesday, Benzinga reports. The brokerage presently has an "outperform" rating on the software maker's stock. Robert W. Baird's price target indicates a potential upside of 36.57% from the stock's current price.

CDNS has been the subject of a number of other research reports. Rosenblatt Securities restated a "buy" rating and set a $420.00 target price on shares of Cadence Design Systems in a report on Friday. Needham & Company LLC reiterated a "buy" rating and issued a $400.00 price target on shares of Cadence Design Systems in a report on Tuesday, July 28th. Bank of America boosted 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. Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a $420.00 price objective (up from $400.00) on shares of Cadence Design Systems in a report on Wednesday, October 7th. Finally, KeyCorp reaffirmed an "overweight" rating on shares of Cadence Design Systems in a research report on Tuesday, July 28th. One research analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating and three have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $406.41.

Cadence Design Systems Stock Performance

Shares of NASDAQ:CDNS opened at $322.17 on Tuesday. The company has a current ratio of 1.74, a quick ratio of 1.53 and a debt-to-equity ratio of 0.36. The company has a 50-day moving average price of $318.83 and a 200-day moving average price of $326.92. The company has a market cap of $88.72 billion, a price-to-earnings ratio of 64.05, a price-to-earnings-growth ratio of 3.38 and a beta of 1.13. Cadence Design Systems has a 12 month low of $262.75 and a 12 month high of $416.69.

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

Insider Activity

In other news, VP Paul Scannell sold 280 shares of the stock in a transaction that occurred on Wednesday, August 26th. The shares were sold at an average price of $339.00, for a total transaction of $94,920.00. Following the sale, the vice president owned 31,720 shares in the company, valued at $10,753,080. This represents a 0.88% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Paul Cunningham sold 2,000 shares of the stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $277.12, for a total value of $554,240.00. Following the sale, the vice president owned 121,793 shares in the company, valued at approximately $33,751,276.16. This represents a 1.62% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 8,960 shares of company stock worth $2,834,139. Corporate insiders own 0.49% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in CDNS. Van ECK Associates Corp boosted its position in shares of Cadence Design Systems by 21.8% in the second quarter. Van ECK Associates Corp now owns 4,889,765 shares of the software maker's stock worth $1,835,227,000 after purchasing an additional 874,392 shares during the period. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its stake in Cadence Design Systems by 1.5% during 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 valued at $1,270,704,000 after purchasing an additional 48,937 shares during the period. Assenagon Asset Management S.A. lifted its holdings in Cadence Design Systems by 1,097.5% in the 3rd quarter. Assenagon Asset Management S.A. now owns 2,818,141 shares of the software maker's stock worth $930,522,000 after purchasing an additional 2,582,812 shares in the last quarter. Amundi lifted its holdings in Cadence Design Systems by 3.8% in the 1st quarter. Amundi now owns 2,060,334 shares of the software maker's stock worth $572,488,000 after purchasing an additional 75,492 shares in the last quarter. Finally, Legal & General Group Plc purchased a new position in Cadence Design Systems in the 2nd quarter worth approximately $702,615,000. 84.85% of the stock is owned by hedge funds and other institutional investors.

Key Cadence Design Systems News

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.

About Cadence Design Systems

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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