UPDATE: Piper Jaffray Initiates Coverage on Cadence Design Systems

According to a research report published earlier today, Piper Jaffray has initiated Cadence Design Systems

with an Overweight rating and $17 PT. In the report, Piper Jaffray commented, "The Electronic Design Automation (EDA) industry has recently undergone consolidation with SNPS' purchase of Magma Design, creating opportunities for CDNS. Additionally, new management has focused on moving to ratable revenue recognition, which has significantly reduced discounting and improved overall deal quality over the last two years. We estimate the percentage of all-you-can-eat contracts was cut in half and is now down to 10-15%. This is driving improving profitability and growth. CDNS is also picking up market share at ARM, Samsung and TXN, in our checks. The company has invested heavily in tools for 28nm and 20nm which we believe bodes well for continued market share momentum." Cadence Design Systems closed Friday at $11.51.