Morgan Stanley analyst Lee Simpson maintained a Buy rating on Cadence Design (CDNS – Research Report) yesterday and set a price target of $325.00.
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Lee Simpson has given his Buy rating due to a combination of factors that highlight Cadence Design’s strong performance and future potential. The company reported earnings that slightly surpassed market expectations, demonstrating effective cost management. Although the backlog and bookings were weaker compared to the previous quarter, they were still better than anticipated, which reflects positively on the company’s operational efficiency.
Furthermore, Cadence Design’s guidance for FY25 has been slightly raised, indicating confidence in its growth trajectory, particularly with AI-enabled tools and new product lines like Z3/X3, which are expected to bolster hardware growth and improve margins. The company also experienced significant growth in its systems and IP segments, and its strategic partnership with NVIDIA underscores its commitment to advancing AI solutions. These elements collectively support the Buy rating as they suggest a robust outlook for the company’s financial performance.
CDNS’s price has also changed moderately for the past six months – from $252.770 to $285.740, which is a 13.04% increase.