Erste Group Bank Issues Optimistic Outlook for CDNS Earnings

Key Points

• Erste Group raised its FY2027 EPS estimate for Cadence to $7.56 (from $7.50), well above the current consensus of $6.22, signaling increased analyst optimism for the company's earnings trajectory.
• Cadence beat quarterly expectations with $1.96 EPS and $1.47 billion revenue (up 18.6% YoY) and reiterated strong guidance, setting FY2026 EPS at $7.85–$7.95 and Q2 EPS at $2.020–$2.080.
• Market sentiment is broadly positive—14 analysts rate the stock a Buy with an average target of $380.59 and large institutions (e.g., Norges Bank, J. Stern) have added sizable positions—although insiders have sold roughly 40,180 shares in the past three months.

Cadence Design Systems, Inc. (NASDAQ:CDNS - Free Report) - Analysts at Erste Group Bank increased their FY2027 earnings per share estimates for shares of Cadence Design Systems in a note issued to investors on Tuesday, May 5th. Erste Group Bank analyst H. Engel now forecasts that the software maker will post earnings of $7.56 per share for the year, up from their prior forecast of $7.50. The consensus estimate for Cadence Design Systems' current full-year earnings is $6.22 per share.

Cadence Design Systems (NASDAQ:CDNS - Get Free Report) last released its quarterly earnings data on Monday, April 27th. The software maker reported $1.96 EPS for the quarter, beating analysts' consensus estimates of $1.91 by $0.05. The company had revenue of $1.47 billion during the quarter, compared to analyst estimates of $1.46 billion. Cadence Design Systems had a net margin of 21.18% and a return on equity of 28.44%. Cadence Design Systems's revenue was up 18.6% compared to the same quarter last year. During the same period last year, the business earned $1.57 earnings per share. Cadence Design Systems has set its FY 2026 guidance at 7.850-7.950 EPS and its Q2 2026 guidance at 2.020-2.080 EPS.

Other analysts also recently issued reports about the stock. Morgan Stanley dropped their price objective on shares of Cadence Design Systems from $385.00 to $370.00 and set an "overweight" rating for the company in a report on Wednesday, February 18th. KeyCorp upped their price target on shares of Cadence Design Systems from $405.00 to $425.00 and gave the company an "overweight" rating in a report on Tuesday, April 28th. Piper Sandler lifted their price objective on Cadence Design Systems from $319.00 to $325.00 and gave the stock a "neutral" rating in a research report on Tuesday, April 28th. Stifel Nicolaus set a $395.00 target price on Cadence Design Systems in a research note on Wednesday, February 18th. Finally, Citigroup upped their target price on Cadence Design Systems from $385.00 to $400.00 and gave the company a "buy" rating in a report on Wednesday, April 29th. Fourteen equities research analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. Based on data from MarketBeat, Cadence Design Systems has an average rating of "Moderate Buy" and an average target price of $380.59.

Cadence Design Systems Stock Performance

NASDAQ:CDNS opened at $354.72 on Friday. Cadence Design Systems has a twelve month low of $262.75 and a twelve month high of $376.45. The stock has a market cap of $97.84 billion, a P/E ratio of 82.67, a PEG ratio of 4.21 and a beta of 1.13. The company has a quick ratio of 1.32, a current ratio of 1.47 and a debt-to-equity ratio of 0.38. The business's 50-day moving average price is $300.45 and its two-hundred day moving average price is $309.70.

Insider Activity

In other news, CFO John M. Wall sold 21,500 shares of the business's stock in a transaction on Thursday, April 16th. The stock was sold at an average price of $309.45, for a total value of $6,653,175.00. Following the completion of the transaction, the chief financial officer owned 86,875 shares in the company, valued at $26,883,468.75. The trade was a 19.84% decrease in their ownership of the stock. The transaction was disclosed in a document filed 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, VP Paul Cunningham sold 1,000 shares of the company's stock in a transaction on Monday, March 2nd. The shares were sold at an average price of $297.78, for a total value of $297,780.00. Following the transaction, the vice president directly owned 94,137 shares in the company, valued at approximately $28,032,115.86. The trade was a 1.05% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 40,180 shares of company stock worth $12,924,790. Corporate insiders own 0.49% of the company's stock.

Hedge Funds Weigh In On Cadence Design Systems

Several hedge funds and other institutional investors have recently bought and sold shares of CDNS. Norges Bank purchased a new position in shares of Cadence Design Systems during the fourth quarter valued at approximately $1,352,922,000. J. Stern & Co. LLP raised its stake in Cadence Design Systems by 10,159.3% during the 4th quarter. J. Stern & Co. LLP now owns 2,953,256 shares of the software maker's stock valued at $923,129,000 after buying an additional 2,924,470 shares during the last quarter. Wellington Management Group LLP lifted its holdings in shares of Cadence Design Systems by 218.6% during the 4th quarter. Wellington Management Group LLP now owns 2,553,225 shares of the software maker's stock valued at $798,087,000 after buying an additional 1,751,927 shares during the period. Massachusetts Financial Services Co. MA boosted its stake in shares of Cadence Design Systems by 16.0% in the 3rd quarter. Massachusetts Financial Services Co. MA now owns 5,314,407 shares of the software maker's stock worth $1,866,739,000 after buying an additional 731,788 shares during the last quarter. Finally, Assenagon Asset Management S.A. grew its holdings in shares of Cadence Design Systems by 120.9% in the fourth quarter. Assenagon Asset Management S.A. now owns 1,124,417 shares of the software maker's stock worth $351,470,000 after acquiring an additional 615,440 shares during the period. Institutional investors own 84.85% of the company's stock.

Cadence Design Systems Company Profile

Cadence Design Systems, Inc NASDAQ: CDNS is a global provider of electronic design automation (EDA) software, hardware and intellectual property used to design and verify advanced semiconductor chips, systems-on-chip (SoCs), printed circuit boards (PCBs) and packaging. Headquartered in San Jose, California and founded in 1988, Cadence serves semiconductor companies, original equipment manufacturers and system designers across the globe, helping customers accelerate design cycles and manage the complexity of modern integrated systems.

The company's offerings span software tools for digital, custom/analog and mixed-signal design, verification and signoff, as well as solutions for system-level modeling, thermal and signal integrity analysis, and PCB and package design.

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