Why The Market Is Mispricing Cadence Design Systems
Trading the Spread • 13 Comments
Trading the Spread • 13 Comments
Mon, Jul. 25, 4:08 PM
Sun, Jul. 24, 5:35 PM
Fri, May 20, 1:32 PM
- After plummeting in November following its FQ3 report (weak results/guidance) and declining in March after its FQ4 report (results beat, but guidance was mixed), Mentor Graphics (MENT +7.3%) is faring much better today after beating FQ1 estimates and issuing solid guidance.
- The chip design hardware/software firm expects FQ2 revenue of $245M and EPS of $0.09 vs. a consensus of $236.4M and $0.09. It's affirming FY17 (ends Jan. '17) guidance for revenue of $1..215B, EPS of $1.68, and op. cash flow of $200M.
- Revenue was still down 16% Y/Y in FQ1, and Mentor notes "weakness in semiconductor-related activity" (caused in part by R&D spending cuts that have followed industry M&A) remained. On the flip side, bookings for automotive customers (have benefited from growing chip/electronics content within cars) hit a new record.
- System/software revenue fell 32% Y/Y to $106.7M, while service/support revenue (fueled by part system/software sales) rose 4% to $120.9M. Non-GAAP operating expenses rose by a modest $500K to $182.5M. Mentor ended FQ1 with $216M in cash and $273M in debt.
- EDA hardware/software peers Cadence (CDNS +2.7%) and Synopsys (SNPS +2.4%) are also outperforming - Synopsys posted an FQ2 beat on Wednesday afternoon. The Nasdaq is up 1.2%.
- Mentor's FQ1 results, earnings release
Mon, Apr. 25, 4:24 PM
- Cadence Design Systems (NASDAQ:CDNS) is off 1.6% after hours following a Q1 report where it beat expectations but guided to the low side on profits.
- It guided to Q2 revenues of $445M-$455M (in line), and GAAP EPS of $0.17-$0.19 (vs. consensus of $0.19) and non-GAAP EPS of $0.27-$0.29 (vs. $0.29 consensus).
- For the full year, it sees revenues of $1.79B-$1.84B (in line); GAAP EPS of $0.71-$0.81 (vs. consensus expectation for $0.81) and non-GAAP EPS of $1.15-$1.25 (vs. $1.21).
- Revenues grew nearly 9% with broad gains, and it was Cadence's best quarter ever for hardware revenue.
- By segment: Product and maintenance, $411.7M (up 7.3%); Services, $36.1M (up 30.3%).
- Conference call to come at 5 p.m. ET.
- Press Release
- Now read Cadence Design Systems: A Long-Term Play On IoT »
Mon, Apr. 25, 4:07 PM
Sun, Apr. 24, 5:35 PM
Wed, Feb. 3, 4:07 PM
- Cadence Design Systems (NASDAQ:CDNS): Q4 EPS of $0.31 beats by $0.02.
- Revenue of $441.1M (+4.3% Y/Y) beats by $0.74M.
Tue, Feb. 2, 5:35 PM
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Nov. 19, 2015, 5:41 PM
- In addition to missing FQ3 estimates, Mentor Graphics (NASDAQ:MENT) has guided for FQ4 revenue of $336M and EPS of $0.47, well below a consensus of $439.3M and $0.97.
- Notably, the EDA hardware/software vendor states the chip industry's massive M&A wave is "having an adverse impact on our ability to close business," as are delays in buying decisions for Mentor's Veloce emulation systems.
- System/software revenue fell 5% Y/Y in FQ3 to $168.7M, while service/support revenue (more stable) rose 6% to $121.8M. Non-GAAP operating expenses rose 3% Y/Y to $201.4M.
- Mentor has plunged to $21.49 after hours. EDA peers are also lower: Cadence (NASDAQ:CDNS) is down 7.7% to $21.35, and Synopsys (NASDAQ:SNPS) is down 2.6% to $51.17.
- Mentor's FQ3 miss, PR
Oct. 26, 2015, 4:07 PM
- Cadence Design Systems (NASDAQ:CDNS): Q3 EPS of $0.28 beats by $0.02.
- Revenue of $433.76M (+8.3% Y/Y) beats by $4.45M.
Oct. 25, 2015, 5:35 PM
Jul. 27, 2015, 4:30 PM
- Cadence (NASDAQ:CDNS) has used its Q2 report to announce a $1.2B buyback program that replaces an existing $450M program. The EDA software vendor expects to use up its new program within 6 quarters.
- The $1.2B buyback is good for repurchasing over 1/5 of shares at current levels. Cadence plans to use a mixture of existing cash, future cash flows, and debt to pay for it. The company had $744M in cash/short-term investments as of July 4, and $349M in debt. $93.1M was spent on buybacks in 1H15.
- Q3 guidance is for revenue of $423M-$433M and EPS of $0.25-$0.27, in-line with a consensus of $429.8M and $0.26. 2015 guidance is for revenue of $1.685B-$1.715B and EPS of $1.00-$1.06, in-line with a consensus of $1.7B and $1.02.
- CDNS +0.9% AH to $19.16.
- Q2 results, PR
Jul. 27, 2015, 4:07 PM
- Cadence Design Systems (NASDAQ:CDNS): Q2 EPS of $0.27 beats by $0.03.
- Revenue of $415.88M (+9.8% Y/Y) misses by $0.48M.
Jul. 26, 2015, 5:35 PM
Apr. 27, 2015, 4:07 PM
- Cadence Design Systems (NASDAQ:CDNS): Q1 EPS of $0.23 beats by $0.02.
- Revenue of $411.36M (+8.7% Y/Y) beats by $2.28M.
Cadence Design Systems, Inc. designs and develops integrated circuits and electronic devices. Its products include Electronic Design Automation, software, emulation hardware, and two categories of intellectual property, commonly referred to as verification IP, and design IP. The company provides... More
Industry: Technical & System Software
Country: United States
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