Cadence Design Systems Inc

CDNS: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$255.00	Drjpfh	Nzvnkjjgs

Cadence Design Systems Earnings: Sequential Improvement Boosted by Healthy AI-Based Demand

Brian Colello , Verushka Shetty

Jul 23, 2024

We keep our $240 per share fair value estimate for narrow-moat Cadence Design Systems after second-quarter results came in above our expectations. Due to the acquisition of Beta CAE Systems, management adjusted its full-year targets and provided lighter-than-expected third-quarter guidance. Our long-term expectations remain intact as we continue to believe Cadence will benefit from the burgeoning adoption of electronic design automation tools driven by chip demand from artificial intelligence. With shares flattish after hours, we continue to view the stock as overvalued.

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