- Cadence Design Systems, Inc (NASDAQ:CDNS) impressed analysts post Q1 beat.
- Baird reiterated Outperform rating on Cadence, adjudging it as a top idea.
- All business groups saw strength, with recurring revenues increasing 19% YoY (led by Digital and System Design) and upfront revenues rising 49% YoY.
- FY22 outlook raised given 1Q strength, upside in 2Q, and favorable backlog development.
- Rosenblatt saw Cadence reported Q1 results beating its estimate by~5% with better margins, as demand for EDA, IP and simulation software remained very healthy.
- Rosenblatt wrote Cadence again demonstrated strong demand across its product lines, including continued traction with new products, such as AI-driven Cerebrus Intelligent Chip Explorer and the updated hardware offering.
- Backlog grew 42% y-o-y to $5.1b, providing ~75% revenue visibility across FY22.
- Rosenblatt marginally increased its estimates and maintained its target price of $170.
- Needham saw Cadence deliver another beat-and-raise quarter, proving that the company can accelerate growth and expand margins against macro headwinds, e.g., inflation and semiconductor cycles, weighing on many software and semiconductor stocks.
- Needham's recent conversations with clients indicate a growing interest in EDA stocks like CDNS, increasingly seen as a potential hedge against a recession and the semiconductor cycle.
- CDNS' strong 1Q22 print might have just provided the proof point.
- Needham raised its estimates and price target to $193 and reiterated Buy.
- Price Action: CDNS shares traded higher by 0.93% at $152.50 on the last check Tuesday.
