Rosenblatt Upgrades Cadence Designs (CDNS) to Buy

Rosenblatt analyst Blair Abernethy upgraded Cadence Designs (NASDAQ: CDNS) from Neutral to Buy with a price target of $360.00 (from $335.00).

The analyst commented: "Cadence reported a solid Q4-25 results across the board, with revenue of $1,440m, up ~6.2% Y/Y on a tough compare, about 1% above our $1,420m forecast (and Consensus $1,423.8m), supported by continued stable contribution in China (13% of Q4 Total Revenue), Upfront revenue at 21% of Total Revenue (vs 18% in Q3) driven by hardware and licenses, and continued uptake of Cadence’s value-adding AI tools offering. Design complexity for lower node chips, AI-related chip projects, Systems customers, and IP demand again supported the results in Q4. Backlog grew a healthy ~11% sequentially to $7.8b (Q3 was $7b) and up 14.7% Y/Y, providing visibility to ~67% of 2026 revenues. Cadence’s initial FY26 outlook (which is typically conservative at the start of the year with limited hardware visibility) is marginally ahead of our prior forecast. The pending ~$3.2b Hexagon simulation acquisition is not yet in the forecasts and should close in the coming weeks. Post Q4, we are again increasing our estimates for FY26-27 and raising our 12-month target price to $360 (was $335). Given the stock’s pullback since September, our view that AI is a tailwind and not a threat for EDA, and now a 27% return to our target price, we are upgrading our rating back to Buy."

For an analyst ratings summary and ratings history on Cadence Designs click here. For more ratings news on Cadence Designs click here.

Shares of Cadence Designs closed at $283.46 yesterday.

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