Semiconductor design software provider Cadence Design Systems (NASDAQ:CDNS) will be reporting earnings tomorrow afternoon. Here's what to look for.
Last quarter Cadence reported revenues of $1.02 billion, up 13.4% year on year, beating analyst revenue expectations by 1.8%. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter.
Is Cadence buy or sell heading into the earnings? Read our full analysis here, it's free.
This quarter analysts are expecting Cadence's revenue to grow 17.9% year on year to $1.06 billion, in line with the 16.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.33 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.4%.
Looking at Cadence's peers in the vertical software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. PTC delivered top-line growth of 18.1% year on year, beating analyst estimates by 2.3% and Doximity reported revenues up 17.4% year on year, exceeding estimates by 6.1%. PTC traded flat on the results, and Doximity was down 10.1%.
Read our full analysis of PTC's results here and Doximity's results here.
There has been positive sentiment among investors in the vertical software segment, with the stocks up on average 8.2% over the last month. Cadence is up 13.4% during the same time, and is heading into the earnings with analyst price target of $289.4, compared to share price of $314.7.
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