Cadence Design Systems (CDNS) closed at $319.52 in the latest trading session, marking a -1.95% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.28% for the day. At the same time, the Dow added 1.02%, and the tech-heavy Nasdaq lost 0.02%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 10.5% outpaced the Computer and Technology sector's loss of 2.28% and the S&P 500's gain of 0.67%.
Analysts and investors alike will be keeping a close eye on the performance of Cadence Design Systems in its upcoming earnings disclosure. The company's earnings report is set to go public on October 26, 2026. The company is expected to report EPS of $2.04, up 5.7% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $1.61 billion, up 20.27% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $8.13 per share and revenue of $6.32 billion, which would represent changes of +13.87% and +19.31%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Cadence Design Systems. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.19% higher. Cadence Design Systems currently has a Zacks Rank of #2 (Buy).
Investors should also note Cadence Design Systems's current valuation metrics, including its Forward P/E ratio of 40.06. This denotes a premium relative to the industry average Forward P/E of 16.54.
One should further note that CDNS currently holds a PEG ratio of 2.75. 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 Computer - Software industry currently had an average PEG ratio of 1.37 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 64, positioning it in the top 27% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).