We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you accept our Privacy Policy and Terms of Service, revised from time to time, and you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Buy this Tech Stock and AI Investment Before It Rebounds
Read MoreHide Full Article
Cadence Design Systems, Inc. CDNS is one of the standout tech stocks of the last 15 years, soaring 5,000% to blow away the Tech Sector’s 640% run. Yet, CDNS stock has been flat over the past 12 months, lagging Tech’s 25%.
The recent stagnation allows investors to buy Cadence Design Systems 10% below its highs as it finds support at some key technical levels and looks ready to break out of the trading range it’s been stuck in.
The modeling and computational software giant reports its Q4 earnings results on Tuesday, February 18.
Cadence Design Systems has topped our EPS estimates for five years in a row. CDNS is projected to keep churning out solid double-digit earnings and revenue growth because its portfolio plays a critical role in cutting-edge tech including semiconductors and artificial intelligence.
The Bull Case for This Tech and AI Stock
Cadence Design Systems is one of the giants of electronic systems design. The company’s modeling and computational software help tech companies design chips and other vital technologies.
Cadence and its Intelligent System Design strategy aim to “deliver software, hardware and IP that turn design concepts into reality.” Nvidia (NVDA - Free Report) and other giants depend on Cadence to simulate their cutting-edge semiconductors before they are made.
Image Source: Zacks Investment Research
The growing complexity of semiconductors needed for AI, hyperscale computing, and beyond transformed Cadence into an invaluable partner for many chip companies and a vital part of the semiconductor ecosystem.
Wall Street has flocked to Cadence Design Systems because its modeling and computational software are essential cogs the in lifecycle of semiconductors and other vital technologies. “Customers are achieving outstanding results with Cadence.AI, and I’m excited by its accelerating proliferation as AI rapidly becomes an integral part of the design workflow,” CEO Anirudh Devgan said in prepared Q3 remarks.
CDNS is an AI and a picks-and-shovels tech stock that averaged 14% revenue growth in the trailing five years. Cadence is projected to follow this impressive and consistent sales growth up with 13% revenue expansion in 2024 and 2025 to climb from $4 billion in FY23 to $5.23 billion in FY25.
Cadence’s 2025 and 2026 earnings estimates slowly faded over the last 12 months. Yet Cadence is still projected to grow its adjusted earnings by 15% in FY24 and 16% in FY25, following 20% YoY growth in FY23.
Image Source: Zacks Investment Research
Cadence’s FY24 EPS estimate ticked higher over the last week and its Most Accurate estimate came in slightly above consensus. Plus, it has beaten our EPS estimates for five years in a row, including a 14% beat last quarter.
CDNS has gained more attention from Wall Street analysts recently. Zacks now has 18 brokerage recommendations for Cadence, up from 15 three months ago. Most importantly, 14 of the 18 brokerage recommendations are “Strong Buys.”
Time for Traders and Long-Term Investors to Buy this Great Tech Stock?
Cadence shares have climbed 5,000% in the past 15 years to roughly 8X Tech’s 640% climb. Cadence stock continued its dominant outperformance over the past five years and three years, up 300% and 100%, respectively to double Tech during both periods.
Yet, CDNS stock has slipped 10% from its highs while moving sideways during the past year, lagging Tech’s 25% run and Nvidia’s 65%.
The stock has been stuck in a trading range for over a year and it faced resistance at its 52-week highs four times in the last 12 months (including its recent DeepSeek selloff).
Cadence stock found support at its 200-day moving average, with its 50-week the next line of support.
Image Source: Zacks Investment Research
The biggest thing holding CDNS stock back is its valuation, trading at 52X forward earnings compared to Tech’s 26.8X.
Wall Street has been willing to pay a premium for Cadence’s consistent growth outlook, and investors have been rewarded for doing so.
Image Source: Zacks Investment Research
CDNS is trading near its 10-year median and at almost a 30% discount to its highs. Cadence trades at a 43% discount to its highs when you factor in its long-term earnings growth outlook, with a 3.4 PEG ratio.
Cadence trades 10% below its average Zacks price target and it looks ready to break out if it provides solid guidance.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Buy this Tech Stock and AI Investment Before It Rebounds
Cadence Design Systems, Inc. CDNS is one of the standout tech stocks of the last 15 years, soaring 5,000% to blow away the Tech Sector’s 640% run. Yet, CDNS stock has been flat over the past 12 months, lagging Tech’s 25%.
The recent stagnation allows investors to buy Cadence Design Systems 10% below its highs as it finds support at some key technical levels and looks ready to break out of the trading range it’s been stuck in.
See the Zacks Earnings Calendar to stay ahead of market-making news.
The modeling and computational software giant reports its Q4 earnings results on Tuesday, February 18.
Cadence Design Systems has topped our EPS estimates for five years in a row. CDNS is projected to keep churning out solid double-digit earnings and revenue growth because its portfolio plays a critical role in cutting-edge tech including semiconductors and artificial intelligence.
The Bull Case for This Tech and AI Stock
Cadence Design Systems is one of the giants of electronic systems design. The company’s modeling and computational software help tech companies design chips and other vital technologies.
Cadence and its Intelligent System Design strategy aim to “deliver software, hardware and IP that turn design concepts into reality.” Nvidia (NVDA - Free Report) and other giants depend on Cadence to simulate their cutting-edge semiconductors before they are made.
Image Source: Zacks Investment Research
The growing complexity of semiconductors needed for AI, hyperscale computing, and beyond transformed Cadence into an invaluable partner for many chip companies and a vital part of the semiconductor ecosystem.
Wall Street has flocked to Cadence Design Systems because its modeling and computational software are essential cogs the in lifecycle of semiconductors and other vital technologies. “Customers are achieving outstanding results with Cadence.AI, and I’m excited by its accelerating proliferation as AI rapidly becomes an integral part of the design workflow,” CEO Anirudh Devgan said in prepared Q3 remarks.
CDNS is an AI and a picks-and-shovels tech stock that averaged 14% revenue growth in the trailing five years. Cadence is projected to follow this impressive and consistent sales growth up with 13% revenue expansion in 2024 and 2025 to climb from $4 billion in FY23 to $5.23 billion in FY25.
Cadence’s 2025 and 2026 earnings estimates slowly faded over the last 12 months. Yet Cadence is still projected to grow its adjusted earnings by 15% in FY24 and 16% in FY25, following 20% YoY growth in FY23.
Image Source: Zacks Investment Research
Cadence’s FY24 EPS estimate ticked higher over the last week and its Most Accurate estimate came in slightly above consensus. Plus, it has beaten our EPS estimates for five years in a row, including a 14% beat last quarter.
CDNS has gained more attention from Wall Street analysts recently. Zacks now has 18 brokerage recommendations for Cadence, up from 15 three months ago. Most importantly, 14 of the 18 brokerage recommendations are “Strong Buys.”
Time for Traders and Long-Term Investors to Buy this Great Tech Stock?
Cadence shares have climbed 5,000% in the past 15 years to roughly 8X Tech’s 640% climb. Cadence stock continued its dominant outperformance over the past five years and three years, up 300% and 100%, respectively to double Tech during both periods.
Yet, CDNS stock has slipped 10% from its highs while moving sideways during the past year, lagging Tech’s 25% run and Nvidia’s 65%.
The stock has been stuck in a trading range for over a year and it faced resistance at its 52-week highs four times in the last 12 months (including its recent DeepSeek selloff).
Cadence stock found support at its 200-day moving average, with its 50-week the next line of support.
Image Source: Zacks Investment Research
The biggest thing holding CDNS stock back is its valuation, trading at 52X forward earnings compared to Tech’s 26.8X.
Wall Street has been willing to pay a premium for Cadence’s consistent growth outlook, and investors have been rewarded for doing so.
Image Source: Zacks Investment Research
CDNS is trading near its 10-year median and at almost a 30% discount to its highs. Cadence trades at a 43% discount to its highs when you factor in its long-term earnings growth outlook, with a 3.4 PEG ratio.
Cadence trades 10% below its average Zacks price target and it looks ready to break out if it provides solid guidance.