- Full-Year Revenue Forecast: Cadence Design now expects revenue to be between $4.60 billion and $4.66 billion, an increase from their previous projection of $4.56 billion to $4.62 billion. Analysts estimated $4.59 billion.
- Full-Year EPS Forecast: Adjusted Earnings Per Share (EPS) is now expected to be between $5.77 and $5.97, slightly adjusted from their prior range of $5.88 to $5.98. The estimate was $5.93.
- Full-Year Operating Margin: The adjusted operating margin is anticipated to be between 41.7% and 43.3%, compared to the earlier forecast of 42% to 43%. The estimate was 42.7%.
- Third Quarter Forecast:
- Adjusted EPS is projected to be between $1.39 and $1.49, below the estimate of $1.60.
- Revenue forecast ranges from $1.17 billion to $1.20 billion, close to the estimate of $1.19 billion.
- Adjusted operating margin is expected to be between 40.7% and 42.3%, versus the estimate of 44.3%.
- Second Quarter Results:
- Adjusted EPS came in at $1.28, up from $1.22 year-over-year (y/y) and above the estimate of $1.23.
- Revenue was $1.06 billion, an 8.6% increase y/y, beating the $1.05 billion estimate.
- Product and maintenance revenue reached $960.5 million, a 4.1% increase y/y, but below the $979.3 million estimate.
- Services revenue was $100.2 million, a significant 86% increase y/y, surpassing the $68.4 million estimate.
- Adjusted operating margin was 40%, compared to 42% y/y and above the estimate of 39.1%.
- Adjusted net income was $350.7 million, a 5.1% increase y/y, exceeding the $336.8 million estimate.
- Market Reaction: Shares rose 2.8% in post-market trading to $295.15 on 15,262 shares traded.
- Analyst Ratings: The stock has 10 buy ratings, 4 hold ratings, and 1 sell rating.
Cadence Design Sys on Smartkarma
Analyst coverage on Cadence Design Systems by top independent analysts on Smartkarma highlights the company’s strong performance in the first quarter of 2024. Baptista Research reported that Cadence exceeded expectations, with revenue hitting $1.09 billion and non-GAAP earnings per share reaching $1.17. The company’s record backlog of $6 billion, driven by trends in AI, automotive, and 5G technologies, has boosted their revenue outlook for the year.
Baptista Research also emphasized Cadence’s exceptional start to 2024, surpassing guidance on all financial metrics and increasing their financial outlook for the year. With an unexpected record backlog of $6 billion, Cadence is well-positioned for future growth. Value Investors Club highlighted Cadence’s revenue growth, high profit margins, and significant customer base, underscoring the company’s pivotal role in providing computational software for semiconductor and systems design.
A look at Cadence Design Sys Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 4 | |
| Resilience | 4 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on Smartkarma Smart Scores, Cadence Design Systems is showing promising long-term prospects. With a high Growth score of 4 and Resilience score of 4, the company is positioned well for future expansion and stability. The Growth score reflects the company’s potential for revenue and earnings growth, while the Resilience score indicates its ability to withstand economic downturns. Despite a lower Dividend score of 1, Cadence Design Systems seems to be focusing more on reinvesting in the business for growth rather than distributing dividends to shareholders. The Value score of 2 suggests that the company’s current stock price may not be considered undervalued.
Cadence Design Systems, Inc. is a company that provides software technology, design, and consulting services in the field of electronic design automation. With a focus on developing complex chips and electronic systems, including semiconductors, Cadence offers a range of professional services to support its clients in the design and realization of innovative products. Overall, the company’s strong emphasis on growth and resilience, as indicated by its Smartkarma Smart Scores, paints a positive picture for its long-term outlook in the technology industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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