Table Of Content
Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. While Cadence Design Systems has exhibited strong financial performance and a solid market position, it has risks and challenges. One potential risk is the highly competitive nature of the EDA industry, with several players offering similar products and services. Price competition and the need to continually innovate to stay ahead are inherent challenges in this market. Moreover, the semiconductor industry is subject to cyclical fluctuations, influenced by economic conditions, geopolitical tensions, and supply chain disruptions. Any slowdown in the global economy or adverse industry conditions could impact Cadence's revenue growth.
Industry, Sector and Symbol
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. In the case of Cadence, the consensus sales estimate of $1.05 billion for the current quarter points to a year-over-year change of +7.4%. The $4.59 billion and $5.19 billion estimates for the current and next fiscal years indicate changes of +12.1% and +13.1%, respectively.
Company Profile
Doing so will help them establish if the stock's future looks promising or ominous. If you're wondering about Cadence Design Systems''s valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance. While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues.
Cadence Design Systems (CDNS) Stock Price, News & Analysis
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.
Cadence Design Systems, Inc. (CDNS) is Attracting Investor Attention: Here is What You Should Know
Any perceived risks or uncertainties in the semiconductor industry could impact investor perception of Cadence's future growth prospects. Nevertheless, we remain optimistic about the burgeoning adoption of electronic design automation tools driven by chip demand from artificial intelligence. Despite the drop in share price, we still view the current stock as slightly overvalued. Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well.
And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system.
Cadence Design Systems Stock Slides After Company Issues Soft Outlook
That means that for every $1 worth of shareholders' equity, the company generated $0.31 in profit. A dynamic and experienced management team leads cadence Design Systems with deep expertise in the semiconductor and technology sectors. Dr. Anirudh Devgan, a seasoned executive, assumed the role of Chief Executive Officer and President in December 2021.
Price Target and Rating
The Zacks Industry Rank assigns a rating to each of the 265 X (Expanded) Industries based on their average Zacks Rank. We’d like to share more about how we work and what drives our day-to-day business.
Cadence Design Systems Inc. stock underperforms Tuesday when compared to competitors - MarketWatch
Cadence Design Systems Inc. stock underperforms Tuesday when compared to competitors.
Posted: Tue, 23 Apr 2024 20:45:00 GMT [source]
Sales & Book Value
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. Cadence Design Systems, Inc. engages in the design and development of integrated circuits and electronic devices. Its products include electronic design automation, software, emulation hardware, and intellectual property, commonly referred to as verification IP, and design IP.
The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Use these ten stocks to generate a safe and reliable source of investment income. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank.
Since 1988 it has more than doubled the S&P 500 with an average gain of +24.20% per year. These returns cover a period from January 1, 1988 through April 1, 2024. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.
Cadence shares remained in a steady uptrend between January 2023 and March of this year, apart from several minor retracements to the 50-day moving average. However, more recently, the price continues to track lower, with the stock last week breaking down below an established 16-month trendline. Amid earnings-related weakness, investors should monitor how the shares respond to a zone of support between a key horizontal line and the 200-day moving average from $247 to $266. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits.
To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).
The company was founded by Alberto Sangiovanni-Vincentelli, Gudmundur A. Hjartarson, K. Bobby Chao, and K. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await.
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