Analog Devices vs Cadence
This page compares Analog Devices and Cadence Design Systems, outlining their business models, financial performance, and market context in a neutral, accessible manner. Educational content, not financial advice.
This page compares Analog Devices and Cadence Design Systems, outlining their business models, financial performance, and market context in a neutral, accessible manner. Educational content, not finan...
Why It's Moving
Analog Devices Caps Fiscal 2025 with Blowout Q4 Results, Fueling Investor Optimism
- Q4 revenue hit $3.08B (+26% YoY) and FY25 totaled $11.02B (+17% YoY), with gross margins expanding to 63.1% signaling pricing power and efficiency gains.
- Generated $4.8B operating cash flow (44% of revenue) and $4.3B free cash flow, returning 96% to shareholders via $2.2B buybacks and $1.9B dividends, plus a $0.99 quarterly dividend.
- CEO Vincent Roche highlighted healthy bookings in industrial and communications, positioning ADI to capitalize on secular growth despite macro headwinds.
Cadence Design Systems powers ahead with record backlog and raised 2025 outlook after stellar Q3 results.
- Q3 billings hit $1.36 billion with 21.8% average YoY growth over recent quarters, highlighting robust customer demand and enhanced liquidity for expansion.
- Earnings crushed estimates at $1.93 per share on $1.34 billion revenue, up 10.1% YoY, with a swift 7.7-month customer acquisition cost payback showcasing product strength.
- Needham analyst upheld Buy rating with $390 target, while stock climbed 2.3% to $337 amid positive analyst updates and market alignment.
Analog Devices Caps Fiscal 2025 with Blowout Q4 Results, Fueling Investor Optimism
- Q4 revenue hit $3.08B (+26% YoY) and FY25 totaled $11.02B (+17% YoY), with gross margins expanding to 63.1% signaling pricing power and efficiency gains.
- Generated $4.8B operating cash flow (44% of revenue) and $4.3B free cash flow, returning 96% to shareholders via $2.2B buybacks and $1.9B dividends, plus a $0.99 quarterly dividend.
- CEO Vincent Roche highlighted healthy bookings in industrial and communications, positioning ADI to capitalize on secular growth despite macro headwinds.
Cadence Design Systems powers ahead with record backlog and raised 2025 outlook after stellar Q3 results.
- Q3 billings hit $1.36 billion with 21.8% average YoY growth over recent quarters, highlighting robust customer demand and enhanced liquidity for expansion.
- Earnings crushed estimates at $1.93 per share on $1.34 billion revenue, up 10.1% YoY, with a swift 7.7-month customer acquisition cost payback showcasing product strength.
- Needham analyst upheld Buy rating with $390 target, while stock climbed 2.3% to $337 amid positive analyst updates and market alignment.
Which Baskets Do They Appear In?
Microchips
The tiny components powering our digital world are creating massive investment opportunities. These carefully selected semiconductor stocks represent the companies building the foundation for AI, smart devices, and our technological future.
Published: May 24, 2025
Explore BasketWhich Baskets Do They Appear In?
Microchips
The tiny components powering our digital world are creating massive investment opportunities. These carefully selected semiconductor stocks represent the companies building the foundation for AI, smart devices, and our technological future.
Published: May 24, 2025
Explore BasketInvestment Analysis
Pros
- Analog Devices has a diverse portfolio of products including data converters, power management ICs, and MEMS technology serving multiple markets such as automotive, industrial, and communications.
- The company has a strong market presence with a large market capitalization around $114 billion and pays a dividend, supporting shareholder returns.
- Analog Devices operates globally with sales channels including direct sales, distributors, and independent representatives, providing broad market access.
Considerations
- The stock shows relatively modest recent price appreciation compared to some peers, indicating slower growth momentum.
- Analog Devices trades at a high P/E ratio (~60), which may reflect elevated valuation risks amid market or economic uncertainty.
- The business faces cyclicality risks inherent to the semiconductor industry, with exposed segments tied to industrial and automotive markets sensitive to economic cycles.
Cadence
CDNS
Pros
- Cadence Design Systems reported a record backlog of $7 billion and raised its 2025 revenue growth outlook to approximately 14% year-over-year.
- The company holds a dominant competitive position in electronic design automation (EDA) software, crucial for chip verification and design.
- Cadence has strong analyst support with an average 'Buy' rating and upward price targets suggesting around 13-21% potential stock price appreciation.
Considerations
- Cadence has a high price-to-earnings ratio above 80, indicating premium valuation that may limit downside risk tolerance.
- Its revenue growth and backlog are exposed to semiconductor industry cyclicality, which can affect demand for EDA tools.
- The stock's beta near 1 implies sensitivity to broader equity market fluctuations, reflecting moderate market risk exposure.
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