Shares of software company Cadence Design (NASDAQ:CDNS) sank in after-hours trading after the company reported earnings for its first quarter of Fiscal Year 2024, which were followed up with a soft Q2 guidance.
Earnings per share came in at $1.17, which beat analysts’ consensus estimate of $1.13 per share. However, sales decreased by 1% year-over-year, with revenue hitting $1.01 billion. This missed analysts’ expectations by $10 million.
Looking forward, management now expects revenue and adjusted earnings per share for FY 2024 to be in the ranges of $4.56 billion to $4.62 billion and $5.88 to $5.98, respectively. For reference, analysts were expecting $4.59 billion in revenue along with an adjusted EPS of $5.94.
However, second-quarter guidance was much lower than expected. The upper end of the revenue and EPS ranges were $1.05 billion and $1.24, respectively. Meanwhile, analysts were looking for $1.11 billion for the former and $1.43 for the latter.
Is CDNS Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CDNS stock based on eight Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 33% rally in its share price over the past year, the average CDNS price target of $326.91 per share implies 14.7% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
