Cadence Design Systems Fell 3% Last Week. What Comes Next for the Stock?

Key Stats for Cadence Design Systems Stock

• Past-Week Performance: -2.9%
• Current Share Price: $314
• Valuation Model Target Price: $410
• Implied Upside: 33.5% over 1.9 years

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What Happened?

Cadence Design Systems (CDNS) stock fell about 2.9% over the past week, pulling back after trading modestly higher early in the period and finishing near $314, around the middle of its recent trading range.

There were no earnings releases or guidance updates scheduled for Cadence during the week, and the decline unfolded through gradual selling late in the period rather than a single headline-driven move.

Shares eased lower alongside other high-valuation software and semiconductor stocks, suggesting the pullback reflected profit-taking after recent gains, not a Cadence-specific development.

The move does not appear to reflect a shift in expectations around Cadence’s business, demand environment, or long-term growth outlook.

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Is Cadence Design Systems Undervalued?

Under valuation model assumptions, the stock is modeled using:

• Revenue Growth (CAGR): 12.9%
• Operating Margins: 45.2%
• Exit P/E Multiple: 39.9x

Based on these inputs, the model estimates a target price of about $410, implying roughly 33.5% total upside from the model’s $307 starting price over the next 1.9 years.

Over the next 12 months, results hinge on whether large AI-focused chip programs, hyperscaler custom silicon designs, and advanced-node projects continue to move forward, as these engagements typically require broader tool adoption and longer design cycles that support recurring license revenue.

Sustained demand for system design and verification tools, continued adoption of cloud-based design workflows, and pricing strength in mission-critical software remain the key business factors that underpin margin durability.

Taken together, the stock does not appear deeply undervalued, but the valuation still supports moderate upside if AI-driven design activity remains strong and execution stays consistent over the next year.

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