Cadence Design Systems (CDNS) Shares Gap Up on Better-Than-Expected Earnings

Cadence Design Systems Inc (NASDAQ:CDNS)’s share price gapped up before the market opened on Wednesday following a stronger than expected earnings report. The stock had previously closed at $48.28, but opened at $52.64. Cadence Design Systems shares last traded at $55.07, with a volume of 4325253 shares changing hands.

The software maker reported $0.35 earnings per share for the quarter, beating the Zacks’ consensus estimate of $0.29 by $0.06. Cadence Design Systems had a net margin of 16.17% and a return on equity of 28.91%. The business had revenue of $569.90 million for the quarter, compared to analysts’ expectations of $550.22 million. During the same quarter in the previous year, the business posted $0.39 earnings per share. The business’s revenue was up 13.6% compared to the same quarter last year.

CDNS has been the topic of a number of analyst reports. Zacks Investment Research cut shares of Cadence Design Systems from a “buy” rating to a “hold” rating in a research report on Monday, February 4th. Berenberg Bank initiated coverage on shares of Cadence Design Systems in a research report on Tuesday, November 20th. They set a “hold” rating and a $50.00 price objective on the stock. BidaskClub upgraded shares of Cadence Design Systems from a “buy” rating to a “strong-buy” rating in a research report on Friday, February 15th. DA Davidson boosted their target price on shares of Cadence Design Systems to $62.00 and gave the company a “buy” rating in a research note on Wednesday. Finally, Needham & Company LLC boosted their target price on shares of Cadence Design Systems to $60.00 and gave the company a “buy” rating in a research note on Wednesday. Four investment analysts have rated the stock with a hold rating, five have assigned a buy rating and one has given a strong buy rating to the company. The company currently has an average rating of “Buy” and a consensus target price of $53.75.

In other news, insider Thomas P. Beckley sold 23,208 shares of the business’s stock in a transaction on Thursday, January 31st. The shares were sold at an average price of $48.00, for a total transaction of $1,113,984.00. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Lip Bu Tan sold 100,000 shares of the business’s stock in a transaction on Thursday, January 31st. The shares were sold at an average price of $48.05, for a total transaction of $4,805,000.00. The disclosure for this sale can be found here. Insiders have sold 173,208 shares of company stock valued at $8,418,984 over the last three months. Insiders own 2.28% of the company’s stock.

A number of large investors have recently added to or reduced their stakes in CDNS. Oregon Public Employees Retirement Fund lifted its stake in Cadence Design Systems by 3,809.6% in the fourth quarter. Oregon Public Employees Retirement Fund now owns 2,691,151 shares of the software maker’s stock worth $62,000 after acquiring an additional 2,622,317 shares during the period. Parnassus Investments CA lifted its stake in Cadence Design Systems by 13.4% in the fourth quarter. Parnassus Investments CA now owns 14,392,128 shares of the software maker’s stock worth $625,770,000 after acquiring an additional 1,697,043 shares during the period. Man Group plc lifted its stake in Cadence Design Systems by 136.0% in the third quarter. Man Group plc now owns 2,630,238 shares of the software maker’s stock worth $119,202,000 after acquiring an additional 1,515,633 shares during the period. Millennium Management LLC lifted its stake in Cadence Design Systems by 79.8% in the fourth quarter. Millennium Management LLC now owns 2,695,739 shares of the software maker’s stock worth $117,211,000 after acquiring an additional 1,196,155 shares during the period. Finally, Wedge Capital Management L L P NC purchased a new stake in Cadence Design Systems in the fourth quarter worth about $41,166,000. 87.72% of the stock is owned by institutional investors.

The company has a market capitalization of $15.54 billion, a price-to-earnings ratio of 45.04, a PEG ratio of 3.49 and a beta of 1.06. The company has a current ratio of 1.64, a quick ratio of 1.58 and a debt-to-equity ratio of 0.27.

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About Cadence Design Systems (NASDAQ:CDNS)

Cadence Design Systems, Inc provides electronic design automation software, emulation and prototyping hardware, system interconnect, and analysis 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 simulation platform; Palladium Z1, a verification computing platform; and Protium S1 field-programmable gate array prototyping platform.

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