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Here's What to Expect Ahead of Cadence's (CDNS) Q3 Earnings
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Cadence Design Systems (CDNS - Free Report) is scheduled to release third-quarter 2022 results on Oct 24.
For the third quarter, Cadence expects total revenues in the range of $860-$880 million. The Zacks Consensus Estimate for revenues is currently pegged at $869.9 million, suggesting an increase of 15.8% year over year.
Management projects non-GAAP earnings in the range of 94-98 cents per share. The consensus mark for earnings has been steady at 97 cents in the past 30 days, indicating an increase of 21.3% from the prior-year quarter’s reported figure.
The company has a trailing four-quarter earnings surprise of 9.8%, on average. Shares of Cadence have gained 7% in the past year against the industry’s decline of 30.2%.
Image Source: Zacks Investment Research
Factors to Note
Continued momentum witnessed in the company’s digital & signoff, custom & analog and IP solutions and an improving backlog are likely to have acted as tailwinds. The company’s system design & analysis segment is likely to have benefited from increasing presence in domains like 5G, aerospace & defense, wireless and communications.
Deployment of 5G, increasing usage of hyperscale computing and emerging technologies like artificial intelligence and machine learning are fueling digital transformation across various end-markets and boosting demand for advanced semiconductor chips.
Acceleration in chip design activity and increasing system design complexity are expected to have boosted demand for Cadence’s system design and verification solutions among semiconductor companies in the to-be-reported quarter.
New products and strong uptake of the company’s existing solutions like Palladium Z2 and Protium X2 systems, Cerebrus, Clarity 3D Transient Solver, Sigrity-X, and Xcelium Logic are likely to have driven third-quarter performance. In July 2022, Cadence had unveiled its custom power integrity solution — Cadence Voltus - XFi — which is integrated with Cadence Spectre, Virtuoso and Quantus platforms. The Voltus-XFi solution's unified EM-IR cockpit allows customers a path between the Quantus Extraction Solution, Spectre EM-IR simulation and the Virtuoso environment using parameters recommended by the foundry.
Various strategic collaborations are expected to have aided Cadence. On Aug 18, 2022, Cadence collaborated with GlobalFoundries to accelerate 5G and mobile design innovation. GF will be leveraging Cadence Reference Flow and mmWave flow for its GF 22FDX platform. The ongoing digitalization has made designing a difficult process for applications like 5G, Industrial Internet of Things, hyperscale computing etc. The collaboration with GF is aimed at addressing complex design workloads for these SoCs and accelerating time-to-market.
Synergies from the Integrand and AWR buyouts and the recent acquisitions of Pointwise and NUMECA are anticipated to have contributed to the company’s top line.
Increasing expenses on product development amid stiff competition in the electronic design automation space might have impeded margin expansion in the quarter to be reported.
Cadence Design Systems, Inc. Price and EPS Surprise
On Sep 1, Cadence announced that it had successfully acquired OpenEye Scientific Software to expand its reach in the pharmaceutical and biotechnology market. The acquisition is expected to increase revenues by $40 million in 2023, per company estimates.
On Jul 11, Cadence announced the acquisition of a simulation software company — Future Facilities — for an undisclosed sum. The addition of Future Facilities will aid Cadence in improving the company’s Fidelity CFD solution with digital twin solutions, including electronics cooling and energy management solutions.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Cadence this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Cadence has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat earnings this season.
The Zacks Consensus Estimate for Chipotle’s to-be-reported quarter’s earnings and revenues is pegged at $9.09 per share and $2.23 billion, respectively. Shares of CMG have lost 17.2% in the past year.
Verizon Communications (VZ - Free Report) has an Earnings ESP of +0.42% and presently carries a Zacks Rank #3. Verizon Communications is slated to release quarterly numbers on Oct 21.
The Zacks Consensus Estimate for VZ’s to-be-reported quarter’s earnings and revenues is pegged at $1.28 per share and $33.78 billion, respectively. VZ surpassed earnings estimates in three of the preceding four quarters, delivering an average surprise of 1%. Shares of Verizon have lost 31.5% in the past year.
Cathay General Bancorp (CATY - Free Report) has an Earnings ESP of +6.56% and currently has a Zacks Rank #3. Cathay General is scheduled to report earnings on Oct 24.
The Zacks Consensus Estimate for Cathay General’s to-be-reported quarter’s earnings and revenues is pegged at $1.30 per share and $201.7 million, respectively. Cathay General surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 3.9%. Shares of CATY have gained 1.6% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Here's What to Expect Ahead of Cadence's (CDNS) Q3 Earnings
Cadence Design Systems (CDNS - Free Report) is scheduled to release third-quarter 2022 results on Oct 24.
For the third quarter, Cadence expects total revenues in the range of $860-$880 million. The Zacks Consensus Estimate for revenues is currently pegged at $869.9 million, suggesting an increase of 15.8% year over year.
Management projects non-GAAP earnings in the range of 94-98 cents per share. The consensus mark for earnings has been steady at 97 cents in the past 30 days, indicating an increase of 21.3% from the prior-year quarter’s reported figure.
The company has a trailing four-quarter earnings surprise of 9.8%, on average. Shares of Cadence have gained 7% in the past year against the industry’s decline of 30.2%.
Image Source: Zacks Investment Research
Factors to Note
Continued momentum witnessed in the company’s digital & signoff, custom & analog and IP solutions and an improving backlog are likely to have acted as tailwinds. The company’s system design & analysis segment is likely to have benefited from increasing presence in domains like 5G, aerospace & defense, wireless and communications.
Deployment of 5G, increasing usage of hyperscale computing and emerging technologies like artificial intelligence and machine learning are fueling digital transformation across various end-markets and boosting demand for advanced semiconductor chips.
Acceleration in chip design activity and increasing system design complexity are expected to have boosted demand for Cadence’s system design and verification solutions among semiconductor companies in the to-be-reported quarter.
New products and strong uptake of the company’s existing solutions like Palladium Z2 and Protium X2 systems, Cerebrus, Clarity 3D Transient Solver, Sigrity-X, and Xcelium Logic are likely to have driven third-quarter performance. In July 2022, Cadence had unveiled its custom power integrity solution — Cadence Voltus - XFi — which is integrated with Cadence Spectre, Virtuoso and Quantus platforms. The Voltus-XFi solution's unified EM-IR cockpit allows customers a path between the Quantus Extraction Solution, Spectre EM-IR simulation and the Virtuoso environment using parameters recommended by the foundry.
Various strategic collaborations are expected to have aided Cadence. On Aug 18, 2022, Cadence collaborated with GlobalFoundries to accelerate 5G and mobile design innovation. GF will be leveraging Cadence Reference Flow and mmWave flow for its GF 22FDX platform. The ongoing digitalization has made designing a difficult process for applications like 5G, Industrial Internet of Things, hyperscale computing etc. The collaboration with GF is aimed at addressing complex design workloads for these SoCs and accelerating time-to-market.
Synergies from the Integrand and AWR buyouts and the recent acquisitions of Pointwise and NUMECA are anticipated to have contributed to the company’s top line.
Increasing expenses on product development amid stiff competition in the electronic design automation space might have impeded margin expansion in the quarter to be reported.
Cadence Design Systems, Inc. Price and EPS Surprise
Cadence Design Systems, Inc. price-eps-surprise | Cadence Design Systems, Inc. Quote
Recent Developments
On Sep 1, Cadence announced that it had successfully acquired OpenEye Scientific Software to expand its reach in the pharmaceutical and biotechnology market. The acquisition is expected to increase revenues by $40 million in 2023, per company estimates.
On Jul 11, Cadence announced the acquisition of a simulation software company — Future Facilities — for an undisclosed sum. The addition of Future Facilities will aid Cadence in improving the company’s Fidelity CFD solution with digital twin solutions, including electronics cooling and energy management solutions.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Cadence this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Cadence has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider as our model shows that these have the right combination of elements to beat earnings this season.
Chipotle Mexican Grill, Inc (CMG - Free Report) has an Earnings ESP of +2.11% and currently carries a Zacks Rank of 2. Chipotle is set to announce quarterly figures on Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chipotle’s to-be-reported quarter’s earnings and revenues is pegged at $9.09 per share and $2.23 billion, respectively. Shares of CMG have lost 17.2% in the past year.
Verizon Communications (VZ - Free Report) has an Earnings ESP of +0.42% and presently carries a Zacks Rank #3. Verizon Communications is slated to release quarterly numbers on Oct 21.
The Zacks Consensus Estimate for VZ’s to-be-reported quarter’s earnings and revenues is pegged at $1.28 per share and $33.78 billion, respectively. VZ surpassed earnings estimates in three of the preceding four quarters, delivering an average surprise of 1%. Shares of Verizon have lost 31.5% in the past year.
Cathay General Bancorp (CATY - Free Report) has an Earnings ESP of +6.56% and currently has a Zacks Rank #3. Cathay General is scheduled to report earnings on Oct 24.
The Zacks Consensus Estimate for Cathay General’s to-be-reported quarter’s earnings and revenues is pegged at $1.30 per share and $201.7 million, respectively. Cathay General surpassed earnings estimates in the preceding four quarters, delivering an average surprise of 3.9%. Shares of CATY have gained 1.6% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.