It's been a good week for Cadence Design Systems, Inc. (NASDAQ:CDNS) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.4% to US$300. Cadence Design Systems reported in line with analyst predictions, delivering revenues of US$1.2b and statutory earnings per share of US$1.00, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the most recent consensus for Cadence Design Systems from 24 analysts is for revenues of US$5.21b in 2025. If met, it would imply a satisfactory 6.9% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 9.4% to US$4.33. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.19b and earnings per share (EPS) of US$4.33 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

View our latest analysis for Cadence Design Systems

There were no changes to revenue or earnings estimates or the price target of US$320, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Cadence Design Systems, with the most bullish analyst valuing it at US$355 and the most bearish at US$200 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cadence Design Systems shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cadence Design Systems' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Cadence Design Systems' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 9.3% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Cadence Design Systems.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cadence Design Systems' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$320, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Cadence Design Systems going out to 2027, and you can see them free on our platform here..

We also provide an overview of the Cadence Design Systems Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.