Cadence Design Systems Set to Report Earnings Amid Market Challenges

Cadence Design Systems, Inc. (CDNS), valued at a market cap of $71.2 billion, specializes in software, hardware, and services that assist customers in designing electronic products. Headquartered in San Jose, California, the company’s primary offerings include electronic design automation (EDA) software, allowing engineers to create various types of Integrated Circuits (IC). The firm is expected to announce its fiscal Q1 earnings for 2025 after market hours on Monday, April 28.

Analyst Expectations Ahead of Earnings

Analysts anticipate that Cadence will report a profit of $1.17 per share, reflecting a 37.7% increase from $0.85 per share in the same quarter last year. Over the past four quarters, the company has exceeded Wall Street’s bottom-line estimates in two instances, while missing projections in the other two. In the previous quarter, Cadence reported earnings of $1.49 per share, which fell short of consensus estimates by 1.3%.

Annual and Future Growth Projections

For the full fiscal year, analysts project EPS for CDNS to be $5.37, marking a 19.3% growth from $4.50 in fiscal 2024. Looking ahead, EPS is expected to rise by 18.4% year-over-year to $6.36 in fiscal 2026.

Stock Performance Against Market Indices

Over the past 52 weeks, CDNS has experienced a decline of 14.8%, performing worse than the S&P 500 Index’s ($SPX) 5.5% rise and the Technology Select Sector SPDR Fund’s (XLK) 2.6% loss during the same period.

Recent Quarterly Results and Market Reaction

On February 18, Cadence announced its Q4 results, reporting adjusted earnings of $1.88 per share and revenue of $1.4 billion. This reflects year-over-year growth of 36.2% in earnings and 26.9% in revenue, with both figures surpassing consensus estimates. However, the stock dropped 8.8% in the subsequent trading session due to a cautious outlook for 2025, hinting at a potential slowdown in revenue growth. The anticipated revenue for fiscal 2025 ranges between $5.1 billion and $5.2 billion, with a conservative view on its business in China indicating flat revenue from that region.

Analyst Ratings and Price Targets

Analysts express strong optimism for CDNS, granting it a “Strong Buy” rating overall. Among 18 analysts covering the stock, 14 recommend “Strong Buy,” one issues a “Moderate Buy,” two suggest “Hold,” and one rates it as a “Strong Sell.” The average price target for CDNS stands at $324.39, which reflects a 24.5% potential upside from current levels.

On the date of publication, Neharika Jain did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For full details, please consult the Barchart Disclosure Policy here.

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