Cadence Design Systems Beats Up on Analysts Yet Again

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Cadence Design Systems (NAS: CDNS) reported earnings on Feb. 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Cadence Design Systems beat expectations on revenues and earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased.

Gross margins dropped, operating margins expanded, and net margins grew.

Revenue details
Cadence Design Systems reported revenue of $308.0 million. The seven analysts polled by S&P Capital IQ anticipated a top line of $300.5 million. Sales were 24% higher than the prior-year quarter's $249.0 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.17. The seven earnings estimates compiled by S&P Capital IQ predicted $0.15 per share on the same basis. GAAP EPS were $0.04 for Q4 compared to -$0.14 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 84.2%, 20 basis points worse than the prior-year quarter. Operating margin was 14.9%, 1,360 basis points better than the prior-year quarter. Net margin was 3.5%, 1,840 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $292.9 million. On the bottom line, the average EPS estimate is $0.14.

Next year's average estimate for revenue is $1.23 billion. The average EPS estimate is $0.64.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 164 members out of 207 rating the stock outperform, and 43 members rating it underperform. Among 61 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 53 give Cadence Design Systems a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cadence Design Systems is outperform, with an average price target of $12.25.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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