Here's What to Expect From Cadence Design Systems' Next Earnings Report

Cadence Design Systems, Inc. (CDNS), headquartered in San Jose, California, is a leading technology company specializing in electronic design automation (EDA) and intelligent system design. With a market cap of $76.93 billion, Cadence provides advanced software, hardware, and IP solutions, enabling innovative electronics development across various industries. Cadence is scheduled to release its Q3 earnings report after the market closes on Monday, Oct. 28.

Ahead of the event, analysts expect CDNS to report a profit of $1.14 per share, up 12.9% from $1.01 in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in two of the last four quarters while missing on other two occasions.

Its adjusted earnings of $0.96 per share for the last quarter surpassed the consensus estimate by 1.1%. The earnings beat was driven by strong demand for semiconductor and AI solutions and operational efficiencies.

For fiscal 2024, analysts expect CDNS to report EPS of $4.73, up 19.4% from $3.96 in fiscal 2023.  

CDNS stock is up 3.6% on a YTD basis, underperforming the broader S&P 500 Index's ($SPX) 22.9% gains and the iShares Expanded Tech-Software Sector ETF’s (IGV) 15% returns over the same time frame.

CDNS’ stock rose 2.6% after its better-than-expected Q2 earnings release on Jul. 22, benefiting from broad-based customer demand and robust design activity owing to transformative generational trends such as hyperscale computing, 5G, and autonomous driving. However, management’s narrowed EPS, operating margin, and cash flow guidance for 2024 dampened investor confidence, causing the stock to fall 1.4% the next day. 

The consensus opinion on CDNS stock is moderately optimistic, with an overall “Moderate Buy” rating. Of the 14 analysts covering the stock, 10 advise a “Strong Buy” rating, one suggests a “Moderate Buy,” two indicate a “Hold,” and one advises “Strong Sell.” 

CDNS' average analyst price target is $321, indicating a potential upside of 13.8% from the current levels. 

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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.