Cadence Design Systems (CDNS) faces mounting long-term risks, including limited cloud adoption, reliance on on-premise licensing and the industry's shift to consumption-based models, Oppenheimer said Wednesday in a report.
Artificial intelligence presents a dual challenge for Cadance, acting as both a potential disruptor and enhancer of its offerings with emerging AI-native tools, particularly from China, posing competitive threats, Oppenheimer said.
Despite a partial stock rebound, Cadence continues to struggle following disappointing 2025 guidance, the report said. Revenue growth has slowed for three straight years, dropping to an estimated 12% in 2025 from 19% in 2022, Oppenheimer said.
Oppenheimer lowered its price target on Cadence stock to $200 from $225 and maintained its underperform rating, underscoring concerns about the company's ability to adapt to structural shifts in the market.
Cadence shares rose 3.2% in recent trading Wednesday.
Price: 261.87, Change: +7.99, Percent Change: +3.15
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.