The upcoming report from Cadence Design Systems (CDNS) is expected to reveal quarterly earnings of $1.82 per share, indicating an increase of 31.9% compared to the year-ago period. Analysts forecast revenues of $1.35 billion, representing an increase of 26.1% year over year.
The current level reflects a downward revision of 0.6% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.
Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight.
With that in mind, let's delve into the average projections of some Cadence metrics that are commonly tracked and projected by analysts on Wall Street.
The consensus estimate for 'Revenue- Product and maintenance' stands at $1.23 billion. The estimate indicates a year-over-year change of +25.3%.
Analysts expect 'Revenue- Services' to come in at $113.24 million. The estimate suggests a change of +30.7% year over year.
The combined assessment of analysts suggests that 'Revenue Mix by Product Group - Digital IC Design and Signoff' will likely reach 25.1%. The estimate compares to the year-ago value of 29%.
According to the collective judgment of analysts, 'Revenue Mix by Product Group - Functional Verification, including Emulation Hardware' should come in at 26.7%. Compared to the present estimate, the company reported 24% in the same quarter last year.
It is projected by analysts that the 'Revenue Mix by Product Group - IP' will reach 14.1%. The estimate is in contrast to the year-ago figure of 13%.
Analysts' assessment points toward 'Revenue Mix by Product Group - Custom IC Design' reaching 19.5%. The estimate is in contrast to the year-ago figure of 22%.
The consensus among analysts is that 'Revenue Mix by Product Group - System Design and Analysis' will reach 14.6%. Compared to the current estimate, the company reported 12% in the same quarter of the previous year.
View all Key Company Metrics for Cadence here>>>
Shares of Cadence have demonstrated returns of +3.3% over the past month compared to the Zacks S&P 500 composite's +4.3% change. With a Zacks Rank #4 (Sell), CDNS is expected to lag the overall market performance in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
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