Cadence Design Systems (CDNS) closed the latest trading day at $258.70, indicating a +1.9% change from the previous session's end. The stock's change was more than the S&P 500's daily gain of 1.08%. At the same time, the Dow added 0.92%, and the tech-heavy Nasdaq gained 1.41%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had lost 15.49% over the past month. This has lagged the Computer and Technology sector's loss of 13.17% and the S&P 500's loss of 8.26% in that time.
The investment community will be paying close attention to the earnings performance of Cadence Design Systems in its upcoming release. The company is predicted to post an EPS of $1.49, indicating a 27.35% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.24 billion, up 22.76% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.71 per share and revenue of $5.19 billion, indicating changes of +12.4% and +11.76%, respectively, compared to the previous year.
Any recent changes to analyst estimates for Cadence Design Systems should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 3.7% decrease. Right now, Cadence Design Systems possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 37.86. For comparison, its industry has an average Forward P/E of 25.03, which means Cadence Design Systems is trading at a premium to the group.
We can also see that CDNS currently has a PEG ratio of 2.7. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Computer - Software industry stood at 2.13 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 129, this industry ranks in the bottom 49% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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