Cadence Design Systems (CDNS), a semiconductor company that specializes in electronic design automation (EDA), is up more than 6% after hours on Monday to trade above $268 following its latest earnings report. In Q3, Cadence earned an adjusted profit of $1.64 per share on revenue of $1.22 billion, which beat Wall Street’s estimates.
Cadence Design Systems has a market capitalization of approximately $70.09 billion, and has delivered a one-year return of 9.5% - narrowly outperforming its competitor Synopsys (SNPS), but significantly lagging the broader equities market.
Over the past five years, CDNS has demonstrated impressive growth, with revenue increasing at a CAGR of about 13% over this time frame, and earnings by nearly 20%. The average rating for CDNS is a bullish “moderate buy” among the 15 analysts in coverage.
That said, with a forward adjusted price/earnings (P/E) ratio of 43.68 and forward price/sales (P/S) ratio of 15.23, CDNS stock is priced at a premium compared to industry averages. While the shares are valued roughly in line with their historical averages and their specialized EDA peer Synopsys, this suggests that CDNS stock is best-suited for investors with a long-term time horizon who are bullish on the company’s growth story.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
