Semiconductor design software provider Cadence Design Systems (NASDAQ:) will report earnings after the bell tomorrow. Here’s what to look for.
Cadence reported revenue of $1.07 billion last quarter, up 18.8% year over year, in line with analysts’ expectations. It was a weaker quarter for the company, with disappointing revenue guidance for the next quarter.
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For the quarter, analysts expect Cadence’s revenue to decline 0.3% year-over-year to $1.02 billion, slowing the 13.3% year-over-year revenue growth the company posted in the same quarter last year. Adjusted earnings are expected to be $1.13 per share.
Most analysts covering the company have reiterated their estimates over the past thirty days, suggesting they expect the business to continue on its earnings path. Over the past two years, the company missed Wall Street revenue estimates only once and beat revenue expectations by an average of 2.3%.
Looking at Cadence’s vertical software competitors, only Adobe (NASDAQ:) has reported results so far, delivering 11.3% year-over-year revenue growth and beating analysts’ estimates by 0.7%. Shares fell 9.1% at the close.
Read StockStory’s full analysis of Adobe’s results. Stocks, especially growth stocks where future cash flows are more important to the story, finished 2023 well. However, early 2024 saw mixed inflation data, leading to more volatile stock performance. Software stocks are faring slightly better and haven’t been spared, with the share price down 9.3% over the past month. Over the same period, Cadence is down 11.5% and is approaching earnings with an analyst price target of $323.8 compared to the share price of $279.7.