Needham & Company Downgrades Cadence Designs (CDNS) to Hold

Needham & Company downgraded Cadence Designs (NASDAQ: CDNS) from Buy to Hold on valuation.

Analyst Richard Valera commented, "We continue to like Cadence the company, its management team, and--for the most part--its fundamentals. However, the continued outperformance of the shares, in 2015 and year-to-date in 2016, has brought the stock's multiple to post-model-transition highs of ~17.5x C'17 ex-cash NG EPS (and a sharp premium to nearest peer SNPS, trading at ~14.8x), despite a weak macro backdrop and a 2017 outlook that includes a likely moderated stock buyback and tougher comps for its emulation business. While we expect the company is well positioned to continue to meet its guidance, we expect any upside will likely be modest. As such, and with little room for multiple expansion in our opinion, we see the shares as fairly valued and downgrade our rating to Hold from Buy."

For an analyst ratings summary and ratings history on Cadence Designs click here. For more ratings news on Cadence Designs click here.

Shares of Cadence Designs closed at $24.59 yesterday.

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