SoFi shares rise as record revenue, member growth drive strong Q3 results
Investing.com - Stifel has reiterated its Buy rating and $395.00 price target on Cadence Design Systems (NASDAQ:CDNS), now valued at $94 billion, ahead of the company’s third-quarter earnings report scheduled for Monday after market close. According to InvestingPro data, 14 analysts have recently revised their earnings expectations upward for the upcoming period.
Stifel believes that Cadence’s previous full-year guidance raise was likely conservative, given elevated tariff and regulatory risks, while being supported by resilient demand in artificial intelligence, high-performance computing, aerospace and defense, and automotive sectors, alongside a strong second-half renewals cycle. The company’s impressive 85.57% gross profit margin and 22.29% revenue growth support this optimistic outlook.
The firm noted that Cadence stock has been under pressure recently, primarily due to Synopsys’ (NASDAQ:SNPS) earnings miss and guidance reduction in September, which Stifel views as a technical correlation rather than a reflection of Cadence’s fundamentals.
According to Stifel, Cadence’s third-quarter consensus estimates closely track management’s guidance, which includes approximately $141 million for a Department of Justice/Bureau of Industry and Security settlement and about $140 million in tax benefits spread across the second half of the year.
Stifel suggests that current valuation levels offer a fair entry point for investors, and expects Cadence to maintain its premium valuation compared to Synopsys, with the potential for this premium to increase if the company delivers better-than-expected results and raises guidance on Monday. While trading at a high P/E ratio of 94.15x, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value. Discover 12 additional exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.
In other recent news, Cadence Design Systems is poised to release its third-quarter earnings report on October 27, with Rosenblatt Securities maintaining a Neutral rating and a $320.00 price target. Analysts at Rosenblatt project Cadence’s revenues for the quarter ending September 30 to reach $1,321 million, marking an 8.7% increase from the previous year. In a significant development, Cadence has entered into an agreement to acquire Hexagon AB’s Design & Engineering business for approximately €2.7 billion, with the transaction expected to close in the first quarter of 2026. Meanwhile, the Cadence Giving Foundation has announced a multi-year commitment to expand the AI Hub at San José State University, providing AI design software and digital twin technology. Additionally, Cadence Molecular Sciences has launched ROCS X, an AI-enabled virtual screening solution for drug discovery, developed in collaboration with Treeline Biosciences. Furthermore, Cadence has expanded its collaboration with Taiwan Semiconductor Manufacturing Company (TSMC) to support advanced process nodes, including N3, N2, and A16 technologies. These developments highlight Cadence’s ongoing efforts to enhance its technological capabilities and expand its market presence.
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