Cadence Design (NASDAQ:CDNS) Systems Inc (NASDAQ:CDNS) Senior Vice President Paul Cunningham sold 650 shares of the company's stock on June 11, according to a recent Form 4 filing with the Securities and Exchange Commission. The transaction was executed at an average price of $295.0 per share, totaling $191,750.
The sale was conducted under a Rule 10b5-1 Trading Plan, which was previously adopted on March 12, 2024. Such plans allow company insiders to set up a predetermined schedule for buying or selling shares at a time when they are not in possession of material non-public information, providing a defense against claims of insider trading.
Following this transaction, Cunningham still owns a total of 66,494 shares in the company, which are held directly. The sale represents a partial divestment from Cunningham's stake in the company, which develops software used in the design of electronic systems and circuits.
Cadence Design Systems has not made any comments regarding the transaction, and it remains a routine disclosure of stock trades made by company executives. Shareholders often monitor insider sales as they can provide insights into an executive's view of the company's current valuation and future prospects.
In other recent news, Cadence Design Systems has finalized the acquisition of BETA CAE (NYSE:CAE) Systems International AG, aiming to broaden its reach in various industries and contribute approximately $40 million to Cadence's 2024 revenue. The merger is anticipated to be dilutive to Cadence's 2024 earnings per share by 12 cents on a non-GAAP basis, with accretive expectations set for 2025. BofA Securities has expressed confidence in Cadence, raising its price target to $350 from $330, citing anticipated growth in the second half of the year and through 2025. In contrast, Piper Sandler has adjusted its outlook on Cadence, lowering the price target from $334 to $318, following mixed signals in Cadence's first-quarter results and second-quarter guidance.
Cadence has also announced advancements in design technology in collaboration with TSMC, enhancing 3D-IC platforms, process design kits, and IP portfolios for TSMC's advanced 2nm process technologies. These enhancements are part of Cadence's Intelligent System Design strategy and TSMC's dedication to providing high-quality design tools. These recent developments highlight Cadence's strategic moves and collaborations aimed at expanding its portfolio and potential for growth.
InvestingPro Insights
The recent insider sale by Cadence Design Systems Inc's (NASDAQ:CDNS) Senior Vice President Paul Cunningham coincides with a period where the company's stock is trading near its 52-week high, with a price percentage of 93.95% of that high. This aligns with an InvestingPro Tip that highlights the stock is currently trading at a high earnings multiple, with a P/E ratio of 79.26 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at 80.88.
Despite the insider sale, Cadence Design Systems boasts impressive fundamentals, as reflected in their gross profit margin of 89.31% for the last twelve months as of Q1 2024. This is a testament to the company's efficiency and is underscored by another InvestingPro Tip noting Cadence's impressive gross profit margins. Additionally, the company's revenue growth over the last twelve months stands at 10.75%, indicating a solid top-line expansion.
For investors considering the broader picture, Cadence Design Systems has been flagged by analysts for trading at a high Price / Book multiple of 23.63 as of Q1 2024, which suggests a premium valuation relative to the company's book value. Shareholders and potential investors may find additional insights by exploring the full range of InvestingPro Tips, which include 17 more tips for Cadence Design Systems at https://www.investing.com/pro/CDNS. To delve deeper into these metrics and gain access to exclusive investment tips, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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