Yahoo Finance Cadence Design Systems, Inc. Just Recorded A 9.2% EPS Beat: Here's What Analysts Are Forecasting Next
Shareholders might have noticed that Cadence Design Systems, Inc. (NASDAQ:CDNS) filed its annual result this time last week. The early response was not positive, with shares down 2.1% to US$294 in the past week. The result was positive overall - although revenues of US$4.1b were in line with what the analysts predicted, Cadence Design Systems surprised by delivering a statutory profit of US$3.82 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Cadence Design Systems after the latest results.
Check out our latest analysis for Cadence Design Systems
Following the latest results, Cadence Design Systems' 14 analysts are now forecasting revenues of US$4.59b in 2024. This would be a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.8% to US$4.12. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.58b and earnings per share (EPS) of US$4.17 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.0% to US$307. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cadence Design Systems, with the most bullish analyst valuing it at US$350 and the most bearish at US$240 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Cadence Design Systems'historical trends, as the 12% annualised revenue growth to the end of 2024 is roughly in line with the 13% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 13% per year. It's clear that while Cadence Design Systems' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Cadence Design Systems going out to 2026, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary 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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
