Why Electronic Systems Designer Cadence Shares Are Down Premarket Today
Portfolio Pulse from Lekha Gupta
Cadence Design Systems Inc (NASDAQ:CDNS) reported Q4 FY23 results with revenue of $1.069 billion, surpassing consensus estimates. Adjusted EPS was $1.38, also above expectations. The company's year-end backlog was $6.0 billion, with $3.2 billion in current remaining performance obligations. However, its Q1 FY24 revenue outlook of $990 million-$1.01 billion and adjusted EPS of $1.10-$1.14 fell short of consensus estimates, leading to a 6.46% premarket drop in shares. Cadence also announced an expanded partnership with NVIDIA Corp (NASDAQ:NVDA) and Dassault Systèmes (OTC:DASTF).

February 13, 2024 | 10:41 am
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POSITIVE IMPACT
Cadence Design Systems Inc has expanded its strategic partnership with Dassault Systèmes, integrating its AI-driven solutions with Dassault's 3DEXPERIENCE works portfolio.
The enhanced partnership and integration of Cadence's AI-driven solutions with Dassault Systèmes' portfolio could open new business avenues for Dassault, potentially positively impacting its stock.
CONFIDENCE 80
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
Cadence Design Systems Inc announced an expansion of its partnership with NVIDIA Corp, which could positively impact NVIDIA's business.
The expanded partnership with Cadence, especially in the context of a millennium multi-physics supercomputer, could enhance NVIDIA's positioning in high-performance computing and AI, likely benefiting its stock in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 75
NEGATIVE IMPACT
Cadence Design Systems Inc reported higher than expected Q4 FY23 earnings but provided a weaker Q1 FY24 outlook, causing a 6.46% premarket drop in shares.
Despite surpassing Q4 FY23 expectations, Cadence's shares fell due to its lower than expected revenue and EPS outlook for Q1 FY24, indicating investor concerns over near-term growth.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100