Cadence Design Systems

Cadence just posted its largest forecast revision in history, but the stock still trades nearly 19% below its peak. Discover which signal prevails and follow Cadence Design Systems' financials on TIKR for free Cadence Design Systems (CDNS) raised its full-year 2026 revenue growth target to 19% on its July 28 earnings call, the largest single-quarter forecast increase in company history. 1 billion. A company of this size rarely raises the bar mid-year by this magnitude. Management did so because demand is broadening, not because a single contract arrived.

Strength extended across all lines. Intellectual property revenue jumped over 40% year-over-year, core EDA was up 18%, system design and analysis grew 37%, and hardware posted another record quarter thanks to AI and high-performance computing demand. Within that mix was a structural win: a multi-year commitment with Intel for its 14A manufacturing process, covering both its EDA tools and design IP. Cadence pursued a deeper relationship with Intel for two decades, and management called these new revenues 100% incremental to its existing base. Hardware remained supply-constrained rather than demand-constrained, another sign that the backlog reflects orders Cadence cannot yet fully ship.

CEO Anirudh Devgan directly linked the revision to that expanding demand on the Q2 earnings call: "Given the growing business momentum and accelerating demand, we are raising our full-year guidance to 19% revenue growth and with higher profitability as we become more central to our customers as a strategic and trusted partner." Devgan also pointed to agentic AI, where four new AI super-agents incorporate Cadence's simulation engines into more design cycles, as a demand accelerator layered on top of that base. Profitability moved alongside the top line.

5%, and free cash flow of $582 million was up 75% year-over-year, proof that growth converts to cash as it scales. Therefore, the development that is re-rating Cadence Design Systems stock is not the earnings beat. It's a record backlog and a record revision arriving together, evidence that the growth the market continues to discount is accelerating. The record revision was underpinned by a win with Intel that Cadence pursued for two decades. 53% below its peak. The stock recovered from that April low, then stalled, failing to reach its peak even as fundamentals hit records.

That gap sits uncomfortably against a record revision and a record backlog, and the market continues to discount decelerating growth in a business that just told investors it is accelerating. Wall Street remains firmly constructive. Seventeen analysts rate the stock a buy and five rate it outperform, versus three holds and no sells. The average price target of $404 implies 19% upside from the current price of $339, and those targets have risen for two consecutive quarters, from $372 to $404, as estimates chased upwardly revised forecasts. The range goes from $300 on the low end to $470 on the high end among 26 estimates, a spread that reflects debate over how long the revision holds.

4 years. A 13% annualized trajectory values the stock as a company capitalizing on growth, not a bounce from a distressed situation—the stable double-digit trajectory that fits a franchise expanding its leadership. The model assumes essentially flat multiples, so projected performance depends on earnings growth, not the market paying more for the stock. That target is achievable because the forces behind the record revision—double-digit growth across all product groups and a commitment with Intel that adds purely incremental revenue—are exactly the durable drivers a five-year model rewards.

1 billion backlog does not support. 5%. TIKR's model places fair value at $591, 74% above where Cadence Design Systems stock trades today. Explore the full valuation breakdown on TIKR for free The only way to truly know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.