Analyst Sumit Dhanda says he believes increased caution -- regarding the electronic design automation maker's ability to deliver sustained bookings growth over upcoming quarters -- is warranted. His caution is predicated on the fact that bookings and sales growth thus far in 2003 have been aided by acquisitions.
In the absence of additional acquisitions, he thinks it will be increasingly difficult for the company to deliver on guidance for 2004. Also, Dhanda says the company's cash-flow generation and balance sheet metrics significantly lag peers. Therefore, the current premium valuation is unwarranted. He has a $6 12-month target.