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San Jose-based Cadence Design (NASDAQ:) Systems, a company specializing in chip design validation, reported robust Q3 earnings on Monday. The firm disclosed earnings of $254.3 million, or 93 cents per share ($1.26 after adjustment), surpassing Zacks analysts’ estimates of $1.21 per share. In addition to this, the company’s Q3 revenue reached $1.02 billion, exceeding the forecasted $1.01 billion. According to InvestingPro Data, Cadence’s revenue has seen a growth rate of 15.76% leading up to Q2 of 2023, with a gross profit margin of an impressive 89.41%.
Looking forward, Cadence has set its sights on Q4, predicting earnings between $1.30 and $1.36 per share and revenue ranging from $1.04 billion to $1.08 billion. The firm’s full-year earnings are projected at $5.07 to $5.13 per share, with an anticipated annual revenue of $4.06 billion to $4.1 billion. InvestingPro Tips suggest that Cadence has a history of consistently increasing earnings per share and operates with a high return on assets, further supporting its positive outlook.
Reflecting these strong results and promising projections, Cadence’s stock has experienced substantial growth this year, climbing 49% since January and reaching a peak of $239.59 in Monday’s closing trade – a significant 51% increase compared to the same period last year. This aligns with InvestingPro Data which shows a 50.71% return over the last year and a year-to-date return of 48.56%. Despite trading at a high P/E ratio of 73.07, InvestingPro Tips indicate that Cadence operates with a high earnings quality, with free cash flow exceeding net income.
In other news from San Jose, cloud and software services provider Calix (NYSE:) Inc., also reported its Q3 results on Monday. The firm posted a profit of $17 million or 24 cents/share, with adjusted earnings reaching 45 cents/share, thereby exceeding analysts’ estimate of 36 cents/share. Calix’s Q3 revenue was slightly above expectations at $263.8 million compared to an anticipated $263.2 million.
Despite these positive figures, Calix’s shares have seen a downward trend this year, declining by 38% and closing at a value of $42.58 on Monday, marking a 30% drop over the past year. For the upcoming quarter, Calix projects earnings of 33-39 cents/share and revenue of $261-$267 million.
For more in-depth analysis and tips on investing, consider checking out InvestingPro’s services here. With over 23 additional tips available for Cadence Design Systems and many more for other companies, InvestingPro provides a wealth of information for informed investing decisions.
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