/Cadence%20Design%20Systems%2C%20Inc_%20logo%20on%20building-by%20JHVEPhoto%20via%20Shutterstock.jpg)
San Jose, California-based Cadence Design Systems, Inc. (CDNS) is a global leader in electronic design automation (EDA) and intelligent system design, empowering innovation in the semiconductor and electronics industries. With a market cap of $82.5 billion, Cadence delivers cutting-edge solutions across diverse segments, including chip design, system verification, and software innovation, enabling customers to develop groundbreaking technologies. The company is set to release its Q4 earnings after the market closes on Tuesday, Feb. 18.
Ahead of the event, analysts expect CDNS to report a profit of $1.51 per share, up 42.5% from $1.06 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 $1.25 per share for the last quarter surpassed the consensus estimate by 9.7%.
For fiscal 2024, analysts expect CDNS to report EPS of $4.75, up nearly 20% from $3.96 in fiscal 2023.
Cadence Design's shares have gained 12% over the past 52 weeks, underperforming the S&P 500 Index's ($SPX) 24.4% gain and the Technology Select Sector SPDR Fund's (XLK) 20.8% gain during the same period.
Shares of CDNS climbed 12.5% following its impressive Q3 earnings release on Oct. 28. The company reported revenue of $1.2 billion, surpassing forecasts, driven by 40% growth in the System Design & Analysis segment and tripled sales of the Cadence.AI portfolio. The robust demand across data center, automotive, and AI verticals and significant revenue contributions from new solutions like Virtuoso Studio highlighted the company's market strength. Additionally, Cadence tightened its 2024 guidance, projecting $4.6 billion - $4.7 billion in revenues and $5.87- $5.93 in EPS, reflecting investor optimism.
The consensus opinion on CDNS stock is bullish, with an overall “Strong Buy” rating. Of the 18 analysts covering the stock, 14 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 $322.70, indicating a potential upside of just 7.3% from the current levels.
