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Key Factors to Note Ahead of Cadence's (CDNS) Q1 Earnings
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Cadence Design Systems (CDNS - Free Report) is scheduled to release first-quarter 2023 results on Apr 24.
For the first quarter, Cadence expects total revenues in the range of $1-$1.02 billion. The Zacks Consensus Estimate for revenues is currently pegged at $1.01 billion, suggesting an increase of 11.5% year over year.
Management projects non-GAAP earnings in the range of $1.23-$1.27 per share. The Zacks Consensus Estimate for earnings has been steady at $1.25 in the past 30 days, indicating an increase of 6.8% from the prior-year quarter’s reported figure.
The company has a trailing four-quarter earnings surprise of 10.5%, on average. Shares of Cadence are up 36% in the past year against the sub-industry’s growth of 2.3%.
Image Source: Zacks Investment Research
Factors to Note
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.
Secular trends like 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. The company’s System Design & Analysis segment is likely to have benefited from increasing presence in domains like 5G, aerospace & defense, and wireless and communications.
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 first-quarter performance. CDNS has been expanding its digital software business by developing front-end Genus and Joules tools, and signoff products like Tempus and Quantus, which have boded well.
In February, Cadence announced the release of 13 new Verification IP (VIP) solutions to help engineers verify their designs in accordance with the latest industry standards. The VIPs support multiple application areas and specifications, including hyperscale data centers, automotive and consumer, and mobile System-on-Chips.
Various strategic collaborations and synergies from the acquisitions (Integrand, AWR, Pointwise and NUMECA) are anticipated to have contributed to the company’s top line.
However, ongoing uncertainty prevailing over the global macroeconomic conditions, surging inflation and geopolitical instability in Europe remain concerns. 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
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 #2. 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 on earnings this season.
The Zacks Consensus Estimate for Meta’s to-be-reported quarter’s earnings and revenues is pegged at $1.96 per share and $27.49 billion, respectively. Shares of META are up 8.8% in the past year.
Spotify Technology (SPOT - Free Report) has an Earnings ESP of +25.96% and presently carries a Zacks Rank #2. SPOT is slated to release quarterly numbers on Apr 25.
The Zacks Consensus Estimate is pegged at a loss of $1.04 per share and $3.36 billion for revenues, respectively. Shares of SPOT are up 9.9% in the past year.
Kimberly-Clark Corporation (KMB - Free Report) has an Earnings ESP of +3.25% and currently has a Zacks Rank #2. KMB is scheduled to report quarterly earnings on Apr 25.
The Zacks Consensus Estimate for KMB’s to-be-reported quarter’s earnings and revenues is pegged at $1.32 per share and $5.07 billion, respectively. Shares of KMB are up 8.7% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Key Factors to Note Ahead of Cadence's (CDNS) Q1 Earnings
Cadence Design Systems (CDNS - Free Report) is scheduled to release first-quarter 2023 results on Apr 24.
For the first quarter, Cadence expects total revenues in the range of $1-$1.02 billion. The Zacks Consensus Estimate for revenues is currently pegged at $1.01 billion, suggesting an increase of 11.5% year over year.
Management projects non-GAAP earnings in the range of $1.23-$1.27 per share. The Zacks Consensus Estimate for earnings has been steady at $1.25 in the past 30 days, indicating an increase of 6.8% from the prior-year quarter’s reported figure.
The company has a trailing four-quarter earnings surprise of 10.5%, on average. Shares of Cadence are up 36% in the past year against the sub-industry’s growth of 2.3%.
Image Source: Zacks Investment Research
Factors to Note
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.
Secular trends like 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. The company’s System Design & Analysis segment is likely to have benefited from increasing presence in domains like 5G, aerospace & defense, and wireless and communications.
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 first-quarter performance. CDNS has been expanding its digital software business by developing front-end Genus and Joules tools, and signoff products like Tempus and Quantus, which have boded well.
In February, Cadence announced the release of 13 new Verification IP (VIP) solutions to help engineers verify their designs in accordance with the latest industry standards. The VIPs support multiple application areas and specifications, including hyperscale data centers, automotive and consumer, and mobile System-on-Chips.
Various strategic collaborations and synergies from the acquisitions (Integrand, AWR, Pointwise and NUMECA) are anticipated to have contributed to the company’s top line.
However, ongoing uncertainty prevailing over the global macroeconomic conditions, surging inflation and geopolitical instability in Europe remain concerns. 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
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 #2. 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 on earnings this season.
Meta Platforms (META - Free Report) has an Earnings ESP of +7.78% and currently flaunts a Zacks Rank of 1. META is set to announce quarterly figures on Apr 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Meta’s to-be-reported quarter’s earnings and revenues is pegged at $1.96 per share and $27.49 billion, respectively. Shares of META are up 8.8% in the past year.
Spotify Technology (SPOT - Free Report) has an Earnings ESP of +25.96% and presently carries a Zacks Rank #2. SPOT is slated to release quarterly numbers on Apr 25.
The Zacks Consensus Estimate is pegged at a loss of $1.04 per share and $3.36 billion for revenues, respectively. Shares of SPOT are up 9.9% in the past year.
Kimberly-Clark Corporation (KMB - Free Report) has an Earnings ESP of +3.25% and currently has a Zacks Rank #2. KMB is scheduled to report quarterly earnings on Apr 25.
The Zacks Consensus Estimate for KMB’s to-be-reported quarter’s earnings and revenues is pegged at $1.32 per share and $5.07 billion, respectively. Shares of KMB are up 8.7% in the past year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.