Cadence Design Systems (NASDAQ:CDNS) Shares Gap Up After Strong Earnings

Key Points

• Cadence Design Systems' stock price gapped up from $333.76 to $355.00 after reporting an earnings per share (EPS) of $1.65, exceeding analysts’ expectations of $1.56.
• The company saw a 20.2% year-over-year increase in revenue, reaching $1.28 billion, compared to analyst estimates of $1.25 billion for the quarter.
• Recent analyst ratings reflect mixed sentiments, with twelve analysts rating the stock as a "buy" while one has rated it as a "sell," indicating varying confidence in the company's future performance.

Cadence Design Systems, Inc. (NASDAQ:CDNS - Get Free Report) shares gapped up before the market opened on Tuesday after the company announced better than expected quarterly earnings. The stock had previously closed at $333.76, but opened at $355.00. Cadence Design Systems shares last traded at $366.84, with a volume of 964,354 shares traded.

The software maker reported $1.65 earnings per share for the quarter, beating the consensus estimate of $1.56 by $0.09. The company had revenue of $1.28 billion during the quarter, compared to analyst estimates of $1.25 billion. Cadence Design Systems had a net margin of 19.88% and a return on equity of 29.65%. Cadence Design Systems's revenue for the quarter was up 20.2% compared to the same quarter last year. During the same quarter in the previous year, the business posted $1.28 EPS.

Wall Street Analyst Weigh In

A number of brokerages have commented on CDNS. Bank of America raised their price objective on Cadence Design Systems from $320.00 to $350.00 and gave the company a "buy" rating in a research note on Tuesday, April 29th. KeyCorp increased their target price on Cadence Design Systems from $358.00 to $405.00 and gave the stock an "overweight" rating in a report on Tuesday. The Goldman Sachs Group began coverage on shares of Cadence Design Systems in a research note on Thursday, July 10th. They set a "buy" rating and a $380.00 price target for the company. Rosenblatt Securities reiterated a "neutral" rating and set a $300.00 price objective on shares of Cadence Design Systems in a report on Friday, July 25th. Finally, Piper Sandler reissued a "neutral" rating and set a $355.00 price objective (up from $328.00) on shares of Cadence Design Systems in a report on Tuesday. One equities research analyst has rated the stock with a sell rating, three have given a hold rating and twelve have issued a buy rating to the company. Based on data from MarketBeat.com, Cadence Design Systems currently has a consensus rating of "Moderate Buy" and an average price target of $359.00.

Insider Activity at Cadence Design Systems

In other Cadence Design Systems news, Director Ita M. Brennan sold 180 shares of the stock in a transaction on Tuesday, June 10th. The stock was sold at an average price of $304.00, for a total transaction of $54,720.00. Following the completion of the transaction, the director directly owned 8,010 shares of the company's stock, valued at approximately $2,435,040. This represents a 2.20% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, VP Paul Cunningham sold 1,000 shares of the business's stock in a transaction on Tuesday, July 1st. The shares were sold at an average price of $306.35, for a total value of $306,350.00. Following the completion of the sale, the vice president owned 105,499 shares in the company, valued at approximately $32,319,618.65. The trade was a 0.94% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold 15,085 shares of company stock valued at $4,652,087 in the last three months. Insiders own 1.99% of the company's stock.

Institutional Investors Weigh In On Cadence Design Systems

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in CDNS. Paragon Advisors LLC boosted its stake in Cadence Design Systems by 16.7% in the 2nd quarter. Paragon Advisors LLC now owns 8,969 shares of the software maker's stock worth $2,764,000 after purchasing an additional 1,285 shares during the period. Bleakley Financial Group LLC increased its holdings in Cadence Design Systems by 1.1% during the 2nd quarter. Bleakley Financial Group LLC now owns 13,499 shares of the software maker's stock worth $4,160,000 after acquiring an additional 146 shares during the period. Ethic Inc. lifted its stake in Cadence Design Systems by 4.9% in the 2nd quarter. Ethic Inc. now owns 26,255 shares of the software maker's stock worth $8,013,000 after purchasing an additional 1,221 shares in the last quarter. Caliber Wealth Management LLC KS boosted its holdings in Cadence Design Systems by 105.5% in the 2nd quarter. Caliber Wealth Management LLC KS now owns 4,985 shares of the software maker's stock valued at $1,536,000 after purchasing an additional 2,559 shares during the period. Finally, Brookstone Capital Management grew its position in shares of Cadence Design Systems by 32.3% during the 2nd quarter. Brookstone Capital Management now owns 23,057 shares of the software maker's stock valued at $7,105,000 after purchasing an additional 5,627 shares in the last quarter. 84.85% of the stock is currently owned by institutional investors.

Cadence Design Systems Trading Up 1.3%

The company has a debt-to-equity ratio of 0.49, a current ratio of 2.82 and a quick ratio of 2.90. The stock has a market cap of $101.31 billion, a P/E ratio of 100.28, a PEG ratio of 5.09 and a beta of 0.99. The firm's fifty day moving average price is $311.64 and its two-hundred day moving average price is $289.87.

About Cadence Design Systems

Cadence Design Systems, Inc provides software, hardware, services, and reusable integrated circuit (IC) design blocks worldwide. The company offers functional verification services, including emulation and prototyping hardware. Its functional verification offering consists of JasperGold, a formal verification platform; Xcelium, a parallel logic simulation platform; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification.