NEW YORK (TheStreet) -- Shares of Cadence Design Systems (CDNS) - Get Report were gaining 3.2% to $22.04 on Tuesday after the software company beat analysts' estimates for earnings in the third quarter.

On Monday, Cadence Design Systems reported earnings of 28 cents a share for the third quarter, above analysts' estimates of 26 cents a share for the quarter. Revenue grew 8.3% year over year to $433.76 million for the quarter, above analysts' estimates of $429.31 million.

"The third quarter was highlighted by proliferation of our new digital and signoff solutions, growth in our IP business, and strong financial performance," President and CEO Lip-Bu Tan said in a statement. "Additionally, we are excited that we have begun shipping our next-generation emulation platform."

Cadence Design Systems said it expects to report earnings of 20 cents to 22 cents a share and revenue of $434 million to $444 million for the fourth quarter. Analysts expect the company to report earnings of 28 cents a share and revenue of $446.24 million for the quarter.

About 5.1 million shares of Cadence Design Systems were traded by 10:50 a.m. Tuesday, above the company's average trading volume of about 2.6 million shares a day.

TheStreet Recommends

TheStreet Ratings team rates CADENCE DESIGN SYSTEMS INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

We rate CADENCE DESIGN SYSTEMS INC (CDNS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

You can view the full analysis from the report here: CDNS

CDNS data by YCharts

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