2024-04-17 08:48:20 ET
Summary
- Cadence Design Systems is a key player in the semiconductor sector, providing Electronic Design Automation (EDA) for chip designers.
- The company has outperformed its competitors over the past decade and has a premium valuation due to its steady growth and high margins.
- There is potential for further growth in the future, driven by increased demand for EDA in the race for AI capabilities in the semiconductor industry.
- Maintaining a PEG of 2.5x the YE25 price target may rise to $434 (+40%) on current consensus estimates.
- High margins and cash flow provide for share buybacks at 2x stock compensation cost.
Summary
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For further details see:
Cadence Design Systems: AI R&D Upside Risk