How Will Cadence Design Systems Stock React To Its Upcoming Earnings?
Cadence Design Systems (NASDAQ:CDNS) is set to report its earnings on Monday, April 27, 2026. The company has $90 Bil in current market capitalization. Revenue over the last twelve months was $5.3 Bil, and it was operationally profitable with $1.6 Bil in operating profits and net income of $1.1 Bil. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader.
There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released.
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Cadence Design Systems’s Historical Odds Of Positive Post-Earnings Return
Some observations on one-day (1D) post-earnings returns:
- There are 17 earnings data points recorded over the last five years, with 7 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 41% of the time.
- However, this percentage decreases to 27% if we consider data for the last 3 years instead of 5.
- Median of the 7 positive returns = 7.2%, and median of the 10 negative returns = -2.1%
Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D | 5D | 21D |
| 2/17/2026 | 7.6% | 2.5% | 2.2% |
| 10/27/2025 | -2.9% | -4.6% | -13.6% |
| 7/28/2025 | 9.7% | 9.3% | 3.1% |
| 2/18/2025 | -8.8% | -17.2% | -13.9% |
| 10/28/2024 | 12.5% | 14.5% | 22.7% |
| 7/22/2024 | -1.4% | -9.8% | -2.0% |
| 4/22/2024 | -1.1% | -0.9% | 1.8% |
| 2/12/2024 | -4.0% | -4.7% | -0.1% |
| 10/23/2023 | -1.0% | -2.6% | 12.7% |
| 7/24/2023 | -1.2% | -3.0% | -6.5% |
| 4/24/2023 | -4.3% | -1.1% | -3.4% |
| 2/13/2023 | 7.2% | 3.7% | 9.3% |
| 10/24/2022 | -5.6% | -5.5% | 3.1% |
| 7/25/2022 | 1.8% | 10.4% | 9.3% |
| 2/22/2022 | 4.2% | 11.3% | 16.3% |
| 10/25/2021 | 3.3% | 3.9% | 8.5% |
| 7/26/2021 | -1.2% | 1.6% | 9.4% |
| SUMMARY STATS | |||
| # Positive | 7 | 8 | 11 |
| # Negative | 10 | 9 | 6 |
| Median Positive | 7.2% | 6.6% | 9.3% |
| Median Negative | -2.1% | -4.6% | -5.0% |
| Max Positive | 12.5% | 14.5% | 22.7% |
| Max Negative | -8.8% | -17.2% | -13.9% |
Correlation Between 1D, 5D and 21D Historical Returns
A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
| History | 1D_5D | 1D_21D | 5D_21D |
|---|---|---|---|
| 5Y History | 28.7% | 7.1% | -18.6% |
| 3Y History | 39.5% | 8.7% | -5.9% |
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