Cadence Design (CDNS) Stock Drops 10% As Benchmark Upgrades to Strong Buy

TLDR

• CDNS dropped ~10.1% on Friday, opening at $334.56 after closing at $364.65, last trading around $327.25
• Benchmark upgraded the stock to “Strong Buy” with a $450 price target on Wednesday
• Q1 EPS came in at $1.96, beating the $1.91 consensus; revenue of $1.47B was up 18.6% year-over-year
• FY2026 EPS guidance set at $7.85–$7.95; Q2 2026 guidance at $2.02–$2.08
• Insiders sold over 157,000 shares worth $60M+ in the last quarter, including CEO Anirudh Devgan

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Cadence Design Systems (CDNS) fell sharply on Friday, dropping around 10.1% to last trade near $327.25 after closing the prior session at $364.65. The stock opened at $334.56 on elevated volume of over 547,000 shares.

Cadence Design Systems, Inc., CDNS

The selloff comes just days after Benchmark initiated coverage with a “Strong Buy” rating and a $450 price target on Wednesday — the highest target currently on the street.

Wall Street broadly remains bullish on the stock. CDNS carries a “Moderate Buy” consensus with an average price target of $393.65, based on ratings from 17 analysts — one Strong Buy, thirteen Buys, and three Holds.

Other recent upgrades include Wells Fargo raising its target from $400 to $425 with an “Overweight” rating in May, KeyCorp moving its target from $405 to $425, and Berenberg Bank setting a $440 target. Stifel also lifted its target from $395 to $432.

Despite Friday’s drop, the stock is still trading above its 200-day moving average of $328.56, though it has slipped below its 50-day moving average of $376.74.

Q1 Earnings Beat, Guidance Holds

Cadence posted Q1 EPS of $1.96, beating the $1.91 consensus by $0.05. Revenue came in at $1.47 billion, slightly above the $1.46 billion estimate, and up 18.6% from the same quarter last year.

The company guided for FY2026 EPS of $7.85–$7.95, with Q2 2026 EPS expected between $2.02 and $2.08. Analysts on average expect full-year EPS of $6.23.

Net margin stood at 21.18% and return on equity was 28.44% for the quarter.

Insider Selling Picks Up

Insider activity has been a talking point. CEO Anirudh Devgan sold 25,005 shares on June 2nd at an average price of $415.00, a transaction totalling $10.38 million. That represented an 8.98% reduction in his position.

Director Ita Brennan sold 180 shares on June 10th at $387.45, and VP Paul Cunningham offloaded 2,000 shares on June 15th at $391.00.

In total, insiders sold 157,057 shares worth over $60.27 million in the last 90 days. All transactions were executed under pre-arranged Rule 10b5-1 trading plans. Insiders now hold just 0.49% of the company.

Institutional investors hold 84.85% of CDNS. Recent buyers include Handelsbanken Fonder AB, which grew its stake by 30.9% in Q2, adding 41,693 shares worth roughly $66.3 million.

The stock has a 52-week range of $262.75 to $416.69 and a market cap of around $90.39 billion at Friday’s depressed levels. The PE ratio stands at 76.44.