Table Of Content
- Key Earnings Data
- Cadence Design Systems, Inc.'s (NASDAQ:CDNS) Stock's On An Uptrend: Are Strong Financials Guiding The Market?
- Price and EPS Surprise Chart
- Terms & Info
- Cadence Design Systems Earnings: Revenue Deceleration and Weak Quarterly Guidance Spark Concern
- ¡Felicidades! To Cadence's 2023 Latinx Students in Technology Scholarship Recipients
As of April 15th, there was short interest totaling 2,460,000 shares, a drop of 10.5% from the March 31st total of 2,750,000 shares. Based on an average daily trading volume, of 1,540,000 shares, the days-to-cover ratio is presently 1.6 days. Cadence Design Systems doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above. We then compared Cadence Design Systems' net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 17% in the same 5-year period, which is a bit concerning.
Key Earnings Data
The industry with the best average Zacks Rank would be considered the top industry (1 out of 265), which would place it in the top 1% of Zacks Ranked Industries. The industry with the worst average Zacks Rank (265 out of 265) would place in the bottom 1%. An industry with a larger percentage of Zacks Rank #1's and #2's will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4's and #5's.
Cadence Design Systems, Inc.'s (NASDAQ:CDNS) Stock's On An Uptrend: Are Strong Financials Guiding The Market?
One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.31 in profit. The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period. Cadence reported revenues of $1.01 billion in the last reported quarter, representing a year-over-year change of -1.2%. Zacks Earnings ESP (Expected Surprise Prediction) looks to find companies that have recently seen positive earnings estimate revision activity. The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season.
Price and EPS Surprise Chart
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Cadence's valuation metrics indicate that the company is trading at a premium compared to its peers. This premium valuation may reflect investors' confidence in Cadence's growth potential and its position as a key player in the EDA industry. The factors driving Cadence's valuation include its consistent revenue and earnings growth, strong market position, and the potential for continued innovation and expansion. The company's focus on artificial intelligence and machine learning in chip design provides a strategic advantage in meeting the industry's evolving needs. Various factors, such as market dynamics, industry trends, and macroeconomic conditions, could influence recent changes in investor sentiment.
Terms & Info
While the EDA industry presents significant growth opportunities, Cadence must remain agile and adapt to evolving market dynamics. Continued investment in research and development, strategic acquisitions, and a customer-centric approach will be vital in maintaining a competitive edge in the industry. The company’s revenue guidance for the period of $1.03 billion to $1.05 billion also missed the mark, which Wall Street had modeled at $1.11 billion.
For the current quarter, Cadence is expected to post earnings of $1.28 per share, indicating a change of +4.9% from the year-ago quarter. Cadence Design Systems' stock is owned by a variety of institutional and retail investors. Top institutional shareholders include Bank of New York Mellon Corp (0.74%), Sumitomo Mitsui Trust Holdings Inc. (0.27%), Allspring Global Investments Holdings LLC (0.23%), Assenagon Asset Management S.A. (0.22%), Los Angeles Capital Management LLC (0.18%) and Global Assets Advisory LLC (0.14%).
Firstly, we acknowledge that Cadence Design Systems has a significantly high ROE. Secondly, even when compared to the industry average of 9.6% the company's ROE is quite impressive. This probably laid the groundwork for Cadence Design Systems' moderate 12% net income growth seen over the past five years. Compared to the Zacks Consensus Estimate of $1.01 billion, the reported revenues represent a surprise of -0.49%.
Following the merger, Cadence quickly established itself as a leader in the EDA space, providing cutting-edge solutions for complex design challenges. Over the years, the company has continued to innovate and expand its product portfolio, catering to the evolving needs of the semiconductor industry. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Cadence is rated Zacks Rank #3 (Hold). Cadence Design Systems is well-positioned to capitalize on several growth opportunities in the semiconductor landscape. With the increasing demand for more complex and power-efficient chips, the company's expertise in advanced node design and low-power solutions becomes critical. The rising prominence of artificial intelligence, machine learning, and data center technologies offers significant growth potential for Cadence.
675 employees have rated Cadence Design Systems Chief Executive Officer Lip-Bu Tan on Glassdoor.com. This puts Lip-Bu Tan in the top 20% of approval ratings compared to other CEOs of publicly-traded companies. Cadence is graded F on this front, indicating that it is trading at a premium to its peers.
Interoperability of EDA tools poses a risk that influential customers could switch to a different vendor with relative ease, which could have an impact on long-term growth. Privacy Policy ¿¿|¿¿ No cost, no obligation to buy anything ever.Past performance is no guarantee of future results. The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Cadence. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
As these technologies drive the development of specialized chips and accelerators, Cadence's design tools and IP solutions play a crucial role in supporting the innovation and optimization of these products. Additionally, the growing adoption of 5G and the Internet of Things (IoT) presents opportunities for Cadence to provide solutions that enable seamless connectivity and efficient data processing. The broader electronic design automation (EDA) industry is a critical enabler of semiconductor development, enabling the creation of sophisticated chips and electronic systems. Cadence Design Systems has established itself as a prominent player in this competitive landscape, offering a diverse portfolio of EDA solutions and IP offerings. The company's competitive advantages include its rich history of technological expertise, an extensive customer base, and a comprehensive product suite. Moreover, Cadence's strategic partnerships with leading semiconductor manufacturers and system integrators further enhance its competitive positioning.
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.
With a background in engineering and leadership positions in the semiconductor industry, he brings a strategic vision and a focus on driving growth and innovation at Cadence. Given that Cadence Design Systems doesn't pay any regular dividends to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business. As a next step, we compared Cadence Design Systems' net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 15% in the same period. First thing first, we like that Cadence Design Systems has an impressive ROE.
Cadence Design Systems, Inc.'s (NASDAQ:CDNS) CEO Will Probably Have Their Compensation Approved By ... - Yahoo Finance
Cadence Design Systems, Inc.'s (NASDAQ:CDNS) CEO Will Probably Have Their Compensation Approved By ....
Posted: Fri, 26 Apr 2024 10:56:49 GMT [source]
The company specializes in providing software, hardware, and silicon structures that facilitate the design of integrated circuits, systems on chips (SoCs), and printed circuit boards. The history of Cadence Design Systems traces back to 1988, when the company was formed through the merger of SDA Systems and ECAD, Inc. SDA Systems was founded in 1983 by Dr. Alberto Sangiovanni-Vincentelli and Dr. Richard Newton, and it was known for its innovations in circuit design technology. ECAD, Inc. was a pioneer in electronic design software and had a strong presence in the EDA market.
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. Cadence Design Systems (CDNS Quick QuoteCDNS - Free Report) has recently been on Zacks.com's list of the most searched stocks. Gain deeper insights into company revenues with a detailed analysis of revenue sources. Explore the updated Options feature, providing in-depth data, and a 3D viewing option.
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