Cadence Design Systems Inc. (NASDAQ:CDNS) on the Path to Profitability

Cadence Design Systems Inc. (NASDAQ:CDNS) on the Path to Profitability


The Cadence Design Systems Inc. (CDNS) shares are trading at higher $93.84 and the avg recommendation for the stock is Moderate Buy. The current analyst price target stands at $90.81.

To add more color to this target, the company’s high over the last year is $95.29 and the low is $51.39. Over the last 52 weeks, CDNS is down -1.52% while the S&P 500 is down -2.38%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, CDNS reported a profit of $543.49 million. Cadence Design Systems Inc. also saw revenues increase to $617.96 million. In addition, CDNS has free cash flow of $195.54 million as of 03-2020 The company’s EBITDA came in at $172.93 million which compares well with its peers.

CDNS booked profit margins of 41.70%, its Return on Equity (ROE) is 55.40%, and its Return on Assets is 32.00%. All told, it is clear that, CDNS needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. CDNS has a short ratio of 1.72 and outstanding shares of 279.19M.

Company Outlook

CDNS has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.46 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 3.54. Cadence Design Systems Inc. CDNS also noted assets of $3.77 billion at the end of the last quarter. Investors should also keep an eye on sector updates as CDNS has historically followed its peers on positive news.

All told, Cadence Design Systems Inc. CDNS has strung together solid data and demonstrated underlying fundamentals. At its current valuation, CDNS represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Cadence Design Systems Inc. CDNS is now commanding a market cap of 25.87B and a float of 274.98M. CDNS is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of CDNS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in CDNS, either long or short, and we have not been compensated for this article.