Cadence Design Systems (NASDAQ:CDNS) Shares Gap Up After Strong Earnings

Shares of Cadence Design Systems, Inc. (NASDAQ:CDNS) gapped up prior to trading on Wednesday following a better than expected earnings announcement. The stock had previously closed at $283.46, but opened at $302.96. Cadence Design Systems shares last traded at $309.7170, with a volume of 1,871,822 shares traded.

The software maker reported $1.99 EPS for the quarter, topping the consensus estimate of $1.91 by $0.08. Cadence Design Systems had a return on equity of 30.13% and a net margin of 20.35%.The business had revenue of $1.44 billion during the quarter, compared to the consensus estimate of $1.42 billion. During the same quarter last year, the company earned $1.88 EPS. Cadence Design Systems’s revenue was up 6.2% on a year-over-year basis. Cadence Design Systems has set its Q1 2026 guidance at 1.890-1.950 EPS and its FY 2026 guidance at 8.050-8.150 EPS.

Trending Headlines about Cadence Design Systems

Here are the key news stories impacting Cadence Design Systems this week:

• Positive Sentiment: Company beat Q4 estimates and raised guidance—Cadence reported Q4 revenue of ~$1.44B and EPS that beat expectations, and issued Q1 and FY‑2026 EPS and revenue guidance that topped Street forecasts, which is the primary driver of today’s upside. Business Wire: Cadence Reports Fourth Quarter and Fiscal Year 2025 Financial Results
• Positive Sentiment: Analyst support — several firms revised forecasts or reaffirmed buy/overweight views after results (Needham reaffirmed buy with a $390 PT; Rosenblatt upgraded to buy with a $360 PT), which helps momentum and buy-side conviction. Benzinga: Analysts Revise Forecasts After Q4
• Neutral Sentiment: Mixed analyst moves — some firms trimmed price targets despite positive results (Morgan Stanley lowered its PT but stayed overweight; Piper Sandler cut its PT and maintained neutral), producing divergent signals for different investor types. The Fly: Morgan Stanley PT Change
• Neutral Sentiment: Trading context — intraday volume is below average and public short‑interest data appear inconsistent; that can amplify price moves but also makes interpretation of flow signals harder. (No specific article)
• Negative Sentiment: Unusual put buying — a surge in put option purchases (8,675 contracts, +172% vs typical daily put volume) indicates some traders are hedging or speculating on a pullback despite the upbeat results.
• Negative Sentiment: Significant insider selling flagged in third‑party data—recent disclosures show multiple insider sales over the past months, which some investors view as a cautionary signal. Quiver Quant: CDNS Stock Rises on Q4 Earnings (insider summary)

Analyst Upgrades and Downgrades

Several analysts have weighed in on CDNS shares. JPMorgan Chase & Co. upped their price objective on shares of Cadence Design Systems from $390.00 to $405.00 and gave the stock an “overweight” rating in a research note on Tuesday, October 28th. Morgan Stanley reduced their target price on Cadence Design Systems from $385.00 to $370.00 and set an “overweight” rating on the stock in a report on Wednesday. KeyCorp restated an “overweight” rating and set a $405.00 price target on shares of Cadence Design Systems in a research report on Tuesday, October 28th. Oppenheimer upgraded Cadence Design Systems from an “underperform” rating to a “market perform” rating and set a $275.00 price objective for the company in a research report on Monday, December 1st. Finally, Rosenblatt Securities raised Cadence Design Systems from a “neutral” rating to a “buy” rating and boosted their price objective for the stock from $335.00 to $360.00 in a research note on Wednesday. Fifteen analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $376.50.

Insider Buying and Selling

In other news, Director Ita M. Brennan sold 180 shares of the company’s stock in a transaction on Wednesday, December 10th. The stock was sold at an average price of $337.48, for a total transaction of $60,746.40. Following the transaction, the director owned 7,650 shares of the company’s stock, valued at $2,581,722. This represents a 2.30% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, VP Paul Scannell sold 5,490 shares of Cadence Design Systems stock in a transaction dated Wednesday, December 10th. The stock was sold at an average price of $339.43, for a total value of $1,863,470.70. Following the completion of the sale, the vice president owned 20,321 shares of the company’s stock, valued at approximately $6,897,557.03. The trade was a 21.27% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 56,475 shares of company stock worth $18,505,486. 0.37% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Cadence Design Systems

Several large investors have recently bought and sold shares of the business. Peterson Wealth Services lifted its stake in Cadence Design Systems by 1,501.3% in the third quarter. Peterson Wealth Services now owns 187,115 shares of the software maker’s stock valued at $65,726,000 after buying an additional 175,430 shares in the last quarter. Pacer Advisors Inc. raised its holdings in shares of Cadence Design Systems by 83.3% during the third quarter. Pacer Advisors Inc. now owns 182,348 shares of the software maker’s stock worth $64,052,000 after acquiring an additional 82,856 shares during the period. Stanley Laman Group Ltd. acquired a new stake in shares of Cadence Design Systems during the third quarter worth $6,177,000. Patton Fund Management Inc. lifted its position in Cadence Design Systems by 1,743.7% in the 3rd quarter. Patton Fund Management Inc. now owns 13,994 shares of the software maker’s stock valued at $4,916,000 after acquiring an additional 13,235 shares in the last quarter. Finally, Westerkirk Capital Inc. acquired a new position in Cadence Design Systems in the 2nd quarter worth $2,024,000. 84.85% of the stock is currently owned by institutional investors and hedge funds.

Cadence Design Systems Stock Performance

The stock has a market cap of $84.26 billion, a P/E ratio of 79.83, a PEG ratio of 3.33 and a beta of 1.01. The stock has a fifty day simple moving average of $309.88 and a 200-day simple moving average of $328.89. The company has a debt-to-equity ratio of 0.48, a quick ratio of 2.84 and a current ratio of 3.05.

About Cadence Design Systems

Cadence Design Systems, Inc (NASDAQ: CDNS) is a global provider of electronic design automation (EDA) software, hardware and intellectual property used to design and verify advanced semiconductor chips, systems-on-chip (SoCs), printed circuit boards (PCBs) and packaging. Headquartered in San Jose, California and founded in 1988, Cadence serves semiconductor companies, original equipment manufacturers and system designers across the globe, helping customers accelerate design cycles and manage the complexity of modern integrated systems.

The company’s offerings span software tools for digital, custom/analog and mixed-signal design, verification and signoff, as well as solutions for system-level modeling, thermal and signal integrity analysis, and PCB and package design.