In a report released today, Charles Shi from Needham maintained a Buy rating on Cadence Design, with a price target of $390.00.
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Charles Shi has given his Buy rating due to a combination of factors including Cadence Design Systems’ impressive financial performance and growth prospects. The company has reported a strong beat-and-raise, enhancing its fiscal year 2025 revenue outlook from a 12.9% growth to a 13.7% growth. This marks a consistent growth pattern of around 14% year-over-year since 2022, despite a volatile macroeconomic environment.
A significant driver of this growth is the robust performance in the hardware sector, which is nearing a 50% year-over-year increase. Additionally, the company’s expansion in China is noteworthy, with growth likely surpassing 20% year-over-year. These factors contribute to maintaining Cadence’s growth rate in the low- to mid-teens range, even as recurring revenue growth has slowed. Looking forward, Charles Shi maintains a positive outlook with an 11% year-over-year growth estimate for fiscal year 2026 and a price target of $390, reinforcing the Buy recommendation.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $395.00 price target.