Earnings To Watch: Cadence (CDNS) Reports Q3 Results Tomorrow

Semiconductor design software provider Cadence Design Systems (NASDAQ:CDNS) will be announcing earnings results tomorrow afternoon. Here’s what to expect.

Cadence beat analysts’ revenue expectations by 1.7% last quarter, reporting revenues of $1.06 billion, up 8.6% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ EBITDA estimates but a decline in its gross margin.

Is Cadence a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Cadence’s revenue to grow 15.4% year on year to $1.18 billion, improving from the 13.4% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.44 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Cadence has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Cadence’s peers in the vertical software segment, only Adobe has reported results so far. It met analysts’ revenue estimates, delivering year-on-year sales growth of 10.6%. The stock was down 8.6% on the results.

Read our full analysis of Adobe’s earnings results here.

There has been positive sentiment among investors in the vertical software segment, with share prices up 2.2% on average over the last month. Cadence is down 5% during the same time and is heading into earnings with an average analyst price target of $307.81 (compared to the current share price of $257.50).

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