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Cadence Design Systems, Inc. (CDNS), headquartered in San Jose, California, is a premier technology company specializing in electronic design automation (EDA) and semiconductor intellectual property. With a market cap of $85.94 billion, CDNS provides cutting-edge solutions that enable the design and development of innovative electronics and integrated circuits. The company's comprehensive suite of products and services supports customers across various industries, including consumer electronics, automotive, and aerospace. CDNS is set to report its fiscal second-quarter earnings for 2024 on Monday, Jul. 22.
Ahead of the event, analysts expect CDNS to report a profit of $0.95 per share, up 1.1% from $0.94 per share in the year-ago quarter. In the last four quarters, the company has missed Wall Street’s bottom-line estimates in two and surpassed them on two other occasions.
Its adjusted earnings of $0.85 per share for the last reported quarter missed the consensus estimate by 1.2%. The stock's performance was driven by cost management, but revenue missed forecasts due to softer sales amid macroeconomic challenges.
For fiscal 2024, analysts expect CDNS to report EPS of $4.77, up 20.5% from $3.96 in fiscal 2023. Fiscal 2025 EPS is expected to grow 18.2% year over year to $5.64.
CDNS stock is up 15.8% on a YTD basis, marginally underperforming the broader S&P 500 Index's ($SPX) 16.1% returns. However, the stock has outperformed the iShares Expanded Tech-Software Sector ETF’s (IGV) 8.3% gains over the same time frame.
Cadence Design’s asset-light business model, scale advantages, and strong competitive positioning encouraged investors. However, the shares fell in three consecutive trading sessions following its Q1 earnings report on Apr. 22. The company's lower Q2 guidance primarily led to the decline.
However, the consensus opinion on CDNS stock is bullish, with an overall “Strong Buy” rating. Out of 13 analysts covering the stock, nine advise a “Strong Buy” rating, one recommends a “Moderate Buy,” and three suggest a “Hold.”
This configuration is slightly less bullish than three months ago when the stock had 10 “Strong Buy” ratings. The average analyst price target for CDNS is $327.92, indicating a potential upside of 3.9% from the current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
