Zacks maintains its "Underperform" rating on Cadence shares
On Jan 4, 2010, Zacks Investment Research issued the following:
Bear of the Day:
Cadence (Nasdaq: CDNS) reported weak results for the third quarter, and blamed the shortfall on softness in EDA spending. We expect that a turnaround is going to take time due to mounting financial problems leading to lackluster growth.
Fourth quarter and 2009 guidance was not encouraging. Although Cadence is offering new products and taking cost-cutting measures, we are not confident in the company's ability to grow and show healthy fundamentals over the near term. Cadence also withdrew its bid for Mentor Graphics in 2008, further dimming its growth prospects.
Cadence recently came out with enhanced versions of its products, but it will take time for these to generate additional revenue. 2011 estimates have been added.
We maintain an Underperform rating on the shares a six-month price target of $4.50 per share.
Zacks Investment Research was formed in 1978 by Leonard Zacks. A PhD in mathematics, Len finds patterns in stock market data that leads to superior investment results. His proprietary stock picking system, the Zacks Rank, outperforms the market by nearly a 3-to-1 margin.