In the latest trading session, Cadence Design Systems (CDNS) closed at $281.12, marking a -2.89% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.62%. On the other hand, the Dow registered a gain of 0.58%, and the technology-centric Nasdaq increased by 0.83%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 1.58% over the past month, lagging the Computer and Technology sector's gain of 2.41% and the S&P 500's gain of 0.8%.
The investment community will be paying close attention to the earnings performance of Cadence Design Systems in its upcoming release. The company is slated to reveal its earnings on April 27, 2026. The company is predicted to post an EPS of $1.91, indicating a 21.66% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.43 billion, indicating a 15.02% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $8.12 per share and revenue of $5.99 billion. These totals would mark changes of +13.73% and +13%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Cadence Design Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 an unchanged state. Cadence Design Systems presently features a Zacks Rank of #3 (Hold).
With respect to valuation, Cadence Design Systems is currently being traded at a Forward P/E ratio of 35.67. This indicates a premium in contrast to its industry's Forward P/E of 15.43.
We can additionally observe that CDNS currently boasts a PEG ratio of 2.79. 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 1.37 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 38, this industry ranks in the top 16% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the 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.
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Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).