Cadence deliver a good result in Q3 surpassing Wall Street expectations on all fronts, driven by its technological leadership, solid execution, diverse customer base, and robust business model. Despite the current macroeconomic uncertainty, it is evident that long-term sustained design activity is being driven by generational drivers like 5G, hyperscale computing, and AI/ML where Cadence is a key player. These long-term trends are hastening the digital revolution in several end markets. The growing hyperconvergence in hardware and software, systems and semis, as well as mechanical and electrical, is also driving the urgent need for further innovation in computation, connection, and storage. Moreover, sophisticated AI/ML technologies can significantly aid in democratizing chip and system development while significantly boosting productivity and outcomes in a climate of increased design complexity, stricter time-to-market requirements, and growing talent shortage. Cadence also added the revolutionary Verisium AI verification tool and the JedAI data platform to their portfolio in Q3. Additionally, the team strengthened its partnership with Teradyne in Q3. The company also went on to acquire OpenEye Scientific Software and introduced the Certus Closure Solution. Overall, we give Cadence a ‘Hold’ rating with a revised target price.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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