Cadence Design Systems (CDNS) closed the most recent trading day at $311.35, moving -0.68% from the previous trading session. The stock's change was less than the S&P 500's daily loss of 0.39%. Meanwhile, the Dow experienced a drop of 0.61%, and the technology-dominated Nasdaq saw a decrease of 0.32%.
The maker of hardware and software products for validating chip designs's stock has climbed by 6.51% in the past month, falling short of the Computer and Technology sector's gain of 7.63% and outpacing the S&P 500's gain of 3.6%.
The investment community will be closely monitoring the performance of Cadence Design Systems in its forthcoming earnings report. In that report, analysts expect Cadence Design Systems to post earnings of $1.82 per share. This would mark year-over-year growth of 31.88%. Simultaneously, our latest consensus estimate expects the revenue to be $1.35 billion, showing a 26.13% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $5.91 per share and revenue of $4.63 billion, which would represent changes of +14.76% and +13.28%, respectively, from the prior year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Cadence Design Systems. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. At present, Cadence Design Systems boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Cadence Design Systems is presently being traded at a Forward P/E ratio of 53. Its industry sports an average Forward P/E of 32.43, so one might conclude that Cadence Design Systems is trading at a premium comparatively.
Investors should also note that CDNS has a PEG ratio of 3.42 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software industry had an average PEG ratio of 2.45 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 85, finds itself in the top 34% echelons of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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