Cadence Design Systems (CDNS) Q4 results are expected to align with prior guidance, with a strong bookings pipeline for the quarter, but stock reactions could be mixed, Oppenheimer said in an earnings preview Friday.
Bookings are anticipated to reach record levels, though quarterly growth may be uneven due to upfront revenue recognition. While the company has consistently exceeded revenue guidance in the past 12 quarters, stock reactions have been mixed, rising only about 40% of the time, according to the note.
The company's AI-driven growth remains elusive, with limited revenue disclosures, and faces a long-term risk as it focuses on AI accelerators while competing with more efficient, faster, and cheaper AI-native software, Oppenheimer said.
Insider selling of Cadence stock also gives mixed signals to the market regarding the company's AI-focused growth path, with the CEO recently selling 60% of his stake and insiders offloading $362 million in shares since the GenAI boom began, the firm added.
Oppenheimer reiterated its underperform rating on Cadence and maintained its $225 price target.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
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