Cadence Design Systems
The 10-second takeaway
For the quarter ended March 30 (Q1), Cadence Design Systems beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew significantly.
Margins grew across the board.
Cadence Design Systems logged revenue of $354.3 million. The eight analysts polled by S&P Capital IQ wanted to see net sales of $348.5 million on the same basis. GAAP reported sales were 12% higher than the prior-year quarter's $315.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.21. The eight earnings estimates compiled by S&P Capital IQ predicted $0.20 per share. Non-GAAP EPS of $0.21 for Q1 were 24% higher than the prior-year quarter's $0.17 per share. GAAP EPS of $0.27 for Q1 were 145% higher than the prior-year quarter's $0.11 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 86.4%, 120 basis points better than the prior-year quarter. Operating margin was 16.4%, 210 basis points better than the prior-year quarter. Net margin was 22.2%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $355.9 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $1.44 billion. The average EPS estimate is $0.89.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 172 members out of 215 rating the stock outperform, and 43 members rating it underperform. Among 53 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Cadence Design Systems a green thumbs-up, and four 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 $16.31.
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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. 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.