Cadence vs Cloudflare
This page compares Cadence and Cloudflare, examining their business models, financial performance, and market context in a clear, neutral way. It presents distinctions and similarities to help readers understand the landscape without speculation. Educational content, not financial advice.
This page compares Cadence and Cloudflare, examining their business models, financial performance, and market context in a clear, neutral way. It presents distinctions and similarities to help readers...
Why It's Moving
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.
Cloudflare surges on analyst upgrades and AI edge amid insider sales and outage hiccups.
- Citizens maintained Market Outperform rating on Dec 8 with $270 target, citing Cloudflare's key role in Google's data visibility edge for AI model training[3][2].
- Director Michelle Zatlyn sold 71,441 shares for $15.8M from Dec 9-11 under Rule 10b5-1 plan, near current prices around $208, signaling routine profit-taking[2][6].
- Recent network outage and Workers script errors investigated, yet analysts like TD Cowen hold Buy at $265, betting on AI platform acquisition of Replicate[2].
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.
Cloudflare surges on analyst upgrades and AI edge amid insider sales and outage hiccups.
- Citizens maintained Market Outperform rating on Dec 8 with $270 target, citing Cloudflare's key role in Google's data visibility edge for AI model training[3][2].
- Director Michelle Zatlyn sold 71,441 shares for $15.8M from Dec 9-11 under Rule 10b5-1 plan, near current prices around $208, signaling routine profit-taking[2][6].
- Recent network outage and Workers script errors investigated, yet analysts like TD Cowen hold Buy at $265, betting on AI platform acquisition of Replicate[2].
Which Baskets Do They Appear In?
The Figma Effect: Investing in Collaborative Tech
Figma's upcoming IPO is creating waves in the tech industry. This collection features companies positioned to benefit from growing demand for digital collaboration tools and a revitalized tech IPO landscape, carefully selected by our expert analysts.
Published: July 2, 2025
Explore BasketWhich Baskets Do They Appear In?
The Figma Effect: Investing in Collaborative Tech
Figma's upcoming IPO is creating waves in the tech industry. This collection features companies positioned to benefit from growing demand for digital collaboration tools and a revitalized tech IPO landscape, carefully selected by our expert analysts.
Published: July 2, 2025
Explore BasketInvestment Analysis
Cadence
CDNS
Pros
- Cadence maintains a leading position in electronic design automation, with a record $7 billion backlog signaling robust demand for its high-value design software.
- Operational efficiency is strong, with expanding GAAP and non-GAAP margins and a 30%+ return on equity, reflecting disciplined cost management and pricing power.
- The company has raised full-year guidance, projects solid revenue growth, and has nearly half its backlog convertible to revenue within 12 months, providing visibility.
Considerations
- Recent quarterly revenue narrowly missed consensus estimates despite healthy growth, raising concerns about near-term top-line momentum in a competitive sector.
- Cadence’s valuation multiples are elevated relative to peers, with a price-to-earnings ratio above 80, potentially limiting upside if growth moderates.
- The stock exhibits higher volatility and has faced selling pressure after earnings, with technical indicators suggesting near-term bearish sentiment among traders.
Cloudflare
NET
Pros
- Cloudflare operates in the rapidly expanding edge computing and cybersecurity markets, with its global network well-positioned to capitalise on rising demand for internet infrastructure.
- The company benefits from high gross margins and recurring revenue streams, typical of leading SaaS businesses, providing stability in uncertain economic environments.
- Cloudflare continues to innovate with new products and services, such as zero trust security and serverless compute, driving customer acquisition and retention.
Considerations
- Despite strong top-line growth, Cloudflare remains unprofitable on a GAAP basis, relying on scale to achieve eventual profitability, which may test investor patience.
- Competition in its core markets is intensifying, with major tech firms and specialised rivals investing heavily in overlapping cloud and security offerings.
- Cloudflare’s valuation reflects aggressive growth expectations, leaving limited room for error if product adoption or margin expansion disappoints in future quarters.
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