Cadence Upgraded to Buy at $360 Target After Q4 Beat and $7.8B Backlog
Cadence posted Q4 non-GAAP EPS of $1.99 versus $1.91 forecast and revenue rose 6.2% year on year to $1.44 billion, while backlog climbed 11% sequentially to $7.8 billion. Rosenblatt upgraded to Buy with a $360 target and raised Q1 EPS guidance to $1.89–$1.95, citing AI-driven demand and the pending $3.2 billion Hexagon acquisition.
1. Q4 Results Beat Expectations
Cadence reported non-GAAP Q4 EPS of $1.99 versus $1.91 consensus and revenue of $1.44 billion, up from $1.356 billion a year earlier, representing 6.2% year-on-year growth. China accounted for 13% of quarterly sales, underscoring broad regional demand.
2. Backlog Growth and AI Demand
Year-end backlog reached a record $7.8 billion, up 11% sequentially and 14.7% year-on-year, providing visibility into roughly 67% of fiscal 2026 revenue. Strength came from AI-related projects, advanced lower-node chip designs and systems customer engagements.
3. Rosenblatt Upgrade and Outlook
Rosenblatt raised its rating to Buy and lifted the price target to $360, citing the post-September pullback as a buying opportunity. The firm hiked Q1 EPS guidance to $1.89–$1.95 and projects FY26 EPS of $8.05–$8.15 on $5.9–$6.0 billion revenue, excluding the pending $3.2 billion Hexagon acquisition.