CADENCE DESIGN SYS INC (NASDAQ:CDNS) – A Strong Growth Stock with a Technical Breakout Pattern

CADENCE DESIGN SYS INC (NASDAQ:CDNS) was identified by our screener as a strong growth stock with a favorable technical setup. The company combines solid fundamentals with a bullish chart pattern, making it worth a closer look.

Strong Growth Fundamentals

• Growth Rating (7/10): CDNS has demonstrated consistent growth, with revenue increasing by 19.55% over the past year and earnings per share (EPS) rising by 26.64%. Future projections suggest continued growth, with EPS expected to climb by 12.08% annually.
• Profitability (9/10): The company maintains high margins, including a gross margin of 85.86% and an operating margin of 30.60%, outperforming most peers in the software industry.
• Financial Health (7/10): CDNS has a strong balance sheet, with a current ratio of 3.07 and manageable debt levels. Its Altman-Z score of 14.62 indicates low bankruptcy risk.

Technical Setup

• Bull Flag Pattern: The stock is currently forming a bull flag, a continuation pattern often seen after a strong upward move. This suggests potential for further gains.
• Support and Resistance: Key support lies near $310, while resistance is around $318. A breakout above resistance could signal an entry opportunity.
• Trend Strength: Both short-term and long-term trends are positive, reinforcing the bullish case.

For a deeper dive, review the full fundamental report and technical analysis.

Our Strong Growth Stocks with Good Technical Setup Ratings screener lists more stocks meeting these criteria and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.