Cadence Design Systems (CDNS)
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
$292.70-4.00%
Close 2026-09-04 · 1-day change
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
Broken: Primary pillar broken — Achieve EPS of about $4.44 per share: FY26 EPS guidance $8.10 vs $4.39 target.
Cadence grows revenue about 17% yearly, hitting $6.175 billion in 2026. Profit margins stay strong near 44.5%. EPS rises to about $4.44 per share. Partnerships with Intel and AI product launches boost its edge.
Growth may slow below 17% as market demand softens. Profit margins could shrink under cost pressures. EPS might miss targets if investments fail to pay off.
The market expects about 18% revenue growth and values Cadence richly with a PE near 49. Our fair value is about 50% below the Street median, reflecting more cautious growth and margin assumptions.
Breaks if: EPS falls below $4.20 in FY26
Breaks if: Operating margin falls below 43.0% in FY26
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a long-term thesis on a technology company with a focus on growth. The current state reflects a cautious outlook due to recent performance and valuation concerns.
The market appears to be pricing in a high valuation relative to peers, suggesting that expectations are elevated. There is a noted fragility in execution quality, which may not fully reflect the expensive valuation.
Management is on track to achieve revenue growth of about 19% and maintain a non-GAAP operating margin near 45%. However, there is a low probability of missing earnings expectations, which is a risk given recent performance trends.
The thesis hinges on management's ability to sustain growth and margin targets while navigating potential headwinds. Key factors include the Fed's interest rate decisions and the performance of other tech sector leaders.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. The recent sharp drop in CDNS stock suggests a potential repricing of the thesis. This follows a notable earnings beat and an increase in the 2026 revenue outlook. However, the overall market sentiment has turned negative, impacting growth stocks like CDNS more severely.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Cadence aims to maintain a non-GAAP operating margin in the range of 43.5% to 44.5% for 2026.
Breaks if: Revenue falls below $6.0 billion in FY26
In the next 1 to 3 years, CDNS faces a mixed outlook with both opportunities and risks that could impact its performance. Not investment advice.