Stock Price & Analysis

Based on the provided data and current market context, here's a concise analysis for CDNS stock:

Technical Analysis

The stock is showing bearish signals in the short term, with RSI at 28.75 indicating oversold conditions. The stock has declined from recent highs around $315 to current levels near $303, breaking below several key moving averages.

Fundamental Outlook

According to recent analyst reports, CDNS has:

• Market cap of approximately $81 billion
• Strong growth in AI design products with AI portfolio sales tripling year-over-year
• Expected EPS growth of 20% year-over-year to $4.75 for fiscal 2024

Analyst Sentiment

Wall Street maintains a "Strong Buy" rating:

• 14 Strong Buy
• 1 Moderate Buy
• 2 Hold
• 1 Strong Sell
• Mean price target: $326.72 (10.7% upside potential)
• Street-high target: $365 (23.7% upside)

Recent Events The stock fell 8.78% after disappointing management guidance, but has shown signs of stabilizing. The company's core business remains strong with growing demand for AI design products.

Recommendation: SELL

Rationale:

• Breaking key technical support levels
• Oversold conditions suggest potential bounce, but overall trend remains bearish
• Recent negative guidance impacts short-term outlook
• Consider re-entering once technical indicators show clear reversal signals

Based on the provided data and recent earnings report, I'll analyze CDNS's price prediction for 2025.

Technical Analysis

The stock is currently showing bearish signals with RSI at 28.75 (oversold territory) and MACD at -7.40 with a negative histogram of -4.15. The stock is trading below its 20-day SMA ($294.80) and 60-day SMA ($302.60), indicating a short-term downtrend.

Fundamental Analysis & Recent Earnings

According to the Q4 2024 earnings report released on February 18, 2025:

• Revenue reached $1.36 billion, exceeding forecast of $1.35 billion
• Adjusted EPS of $1.88 beat estimates of $1.82
• Record year-end backlog of $6.8 billion
• Operating margin improved to 46% from 42.9% year-over-year

2025 Guidance and Valuation

Management's FY2025 guidance:

• Revenue: $5.14-5.22 billion
• Adjusted EPS: $6.65-6.75
• Operating margin: 30.25-31.25%
• Adjusted operating margin: 43.25-44.25%

Price Target Analysis

Based on the current technical and fundamental factors, here's the 2025 price prediction:

• Base case (60% probability): $320-330 Rationale: Strong execution, growing AI portfolio, and robust backlog support continued growth, though at a more moderate pace.

• Bull case (25% probability): $350-365 Rationale: Accelerated AI adoption and market share gains could drive multiple expansion. The Street-high target is $365.

• Bear case (15% probability): $265-285 Rationale: Current support level around Fibonacci S1 ($265.22), with potential macro headwinds and China-related challenges.

Conclusion

Given the strong fundamentals, record backlog, and AI-driven growth opportunities, CDNS stock is expected to reach $325 by end of 2025, representing about 25% upside from current levels. The main catalysts include continued AI adoption, strategic partnerships with industry leaders, and margin expansion.

The S1 support level for CDNS Stock is $252.36 ,The R1 resistant level for CDNS Stock is $293.13.

As of the end of day on 2025-02-28, the price of CDNS Stock was $248.84.

The target price for CDNS Stock according to analyst rating is 327.21, with the highest price target at 355.00 and the lowest at 225.00. Analysts have a Strong Buy rating on CDNS Stock overall.

The market cap of CDNS is $68.1B.

Based on the provided data and recent market analysis, CDNS appears to be overvalued at current levels. The stock's P/E ratio of 71.35 in 2023 is significantly higher than the industry average of 31.41. Technical indicators show bearish signals with RSI at 28.75 indicating oversold conditions, while MACD is negative at -7.40 with a bearish divergence. The stock has underperformed the broader market, declining 1.9% over the past 52 weeks compared to the S&P 500's 22.3% gain. Despite strong fundamentals with 26.1% revenue growth expected in Q4 2024, the current valuation multiples appear stretched relative to historical averages and peer comparisons.

Cadence Design Systems, Inc. is an electronic system designing company. The Company provides computational software, special-purpose computational hardware, intellectual property (IP) and services to multiple vertical sectors. The Company's Custom IC Design and Simulation offerings are used by its customers to create schematic and physical representations of circuits down to the transistor level for analog, mixed-signal, custom digital, memory and radio frequency (RF) designs. Its Digital IC Design and Signoff solutions are used to create logical representations of a digital circuit or an integrated circuit (IC) that can be verified for correctness prior to implementation. The Company’s Functional Verification products are used by its customers to verify that the circuitry or the software they have designed is consistent with the functional specification. Its IP offerings consist of pre-verified, customizable functional blocks.

Based on the provided data and recent market developments, here's a price prediction analysis for CDNS stock in 2030:

Technical Analysis & Current Position

Fundamental Growth Drivers

The stock is currently positioned for strong long-term growth, driven by several key factors:

1. Strong AI Portfolio Growth: Sales of Cadence's AI portfolio nearly tripled year-over-year, indicating the company's successful positioning in the AI design tools market.

2. Record Backlog: The company reported a record year-end backlog of $6.8 billion and cRPO of $3.4 billion, demonstrating strong future revenue visibility.

3. Robust Financial Outlook: For FY2025, Cadence projects revenues of $5.14-$5.22 billion with adjusted operating margins of 43.25-44.25%, showing continued growth momentum.

Price Target 2030

Based on these factors, CDNS stock is expected to reach $850-900 by 2030, representing approximately a 3x increase from current levels. This projection is supported by:

• Continued expansion in AI chip design market
• Strong operational margins above 40%
• Consistent revenue growth trajectory in the 15-20% range annually

IMPORTANT

CDNS has a total of 11200 employees.