Investor Insights

This summary was created by AI, based on 5 opinions in the last 12 months.

Cadence Design Systems (CDNS-Q) is a leading provider of software for semiconductor companies to design their chips. The company is currently facing a Department of Justice probe, but experts believe this won't have a significant impact. CDNS has a strong track record of execution, consistent growth in revenue and EBITDA, and a solid balance sheet with net cash of around $200M. The company also benefits from secular trends driving demand for its software, despite challenges in the end-market demand for some chips and tightened US export laws. Overall, experts view CDNS positively and recommend nibbling into the position over time.

Consensus
Positive
Valuation
Fair Value
BUY

They just disclosed a Dept. of Justice probe, but that changes nothing. They use software to develop semi chips related to AI, a story that won't go away. The DOJ news is its first, small mistep. Happy to own it.

Technology
BUY

They make software for semi companies to make chips. Prospects look strong with the semi business coming out of a down cycle. They carrry more cash than debt.

Technology
BUY ON WEAKNESS
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

CDNS has a strong track record of execution and is now trading at 44x times' Forward P/E (historical averages in the last five years ranging from 27x – 46x). Revenue and EBITDA have been consistently growing at around 13% and 20%, respectively. The balance sheet is solid, with net cash of around $200M. The company is generating tons of cash and returns most of it through repurchases, which we like. The Q1 was mixed, but it raised guidance, underlining the belief that the company benefits from secular trends fueling demand for its software and other tools used to design semiconductors. This is despite weaker end-market demand for some chips and tightened US export laws aimed at China. Trends are sparking more, and more complicated, chip designs that are critical to customers' R&D initiatives. Operating margin fell in 1Q vs. the prior year on a tough comparison, yet it should rise for the year on more revenue and Cadence's strong competitive position. Upfront sales (20% of total in 1Q), such as hardware and some IP products, can create lumpiness in revenue. Overall, we like the name, momentum looks good, and the company has a track record of consistent growth and shareholder-friendly policies over the last few years. Having said that, it is rarely trading cheaply given, CDNS’s valuation is at a premium level compared to peers and the market most of the time, which already reflects the high quality of the business. We would be nibble here and there and averge into the position over time.
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Technology
BUY

They make software that helps semis companies design their chips. Is up 382% in the past 5 years, outperforming the market. Up 27% YTD even after pulling back the past month. A great semis stock you haven't heard of.

Technology
BUY

They're a dominant player in chip design software. Shares have been up 27% since October. They continue to execute in a difficult environment.

Technology
BUY
There was a technical breakdown yesterday, falling below all its moving averages. The wild card, though, is its exposure to China: 13% of revenues.
Technology
BUY
He bought Cadence last week. It's a defensive play on the semi value chain. They provide chip design software and consulting services aimed at enhancing production efficiency. This area is more insulated to slowing capex. Companies are seeking more efficient, next-generation chips. Yes, Cadence is more expensive than others, but it's highly defensive given high free cash flow.
Technology
BUY
They make design tools that make microchips. Earnings are growing at 20%.
Technology
BUY
They make design tools that make microchips. Earnings are growing at 20%.
Technology
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Cadence Design Systems(CDNS-Q) Rating

Ranking : 5 out of 5

Bullish - Buy Signals / Votes : 5

Neutral - Hold Signals / Votes : 0

Bearish - Sell Signals / Votes : 0

Total Signals / Votes : 5

Stockchase rating for Cadence Design Systems is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Cadence Design Systems(CDNS-Q) Frequently Asked Questions

What is Cadence Design Systems stock symbol?

Cadence Design Systems is a American stock, trading under the symbol CDNS-Q on the NASDAQ (CDNS). It is usually referred to as NASDAQ:CDNS or CDNS-Q

Is Cadence Design Systems a buy or a sell?

In the last year, 5 stock analysts published opinions about CDNS-Q. 5 analysts recommended to BUY the stock. 0 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Cadence Design Systems.

Is Cadence Design Systems a good investment or a top pick?

Cadence Design Systems was never recommended as a Top Pick on Stockchase. Read the latest stock experts ratings for Cadence Design Systems.

Why is Cadence Design Systems stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Cadence Design Systems worth watching?

5 stock analysts on Stockchase covered Cadence Design Systems In the last year. It is a trending stock that is worth watching.

What is Cadence Design Systems stock price?

On 2024-02-23, Cadence Design Systems (CDNS-Q) stock closed at a price of $303.36.