Cadence Design Systems (CDNS) ended the recent trading session at $408.00, demonstrating a -2.01% change from the preceding day's closing price. This move lagged the S&P 500's daily loss of 0.74%. At the same time, the Dow lost 1.21%, and the tech-heavy Nasdaq lost 0.89%.
The stock of maker of hardware and software products for validating chip designs has risen by 17.75% in the past month, leading the Computer and Technology sector's gain of 11.4% and the S&P 500's gain of 5.39%.
The investment community will be paying close attention to the earnings performance of Cadence Design Systems in its upcoming release. In that report, analysts expect Cadence Design Systems to post earnings of $2.05 per share. This would mark year-over-year growth of 24.24%. Simultaneously, our latest consensus estimate expects the revenue to be $1.58 billion, showing a 23.58% escalation compared to the year-ago quarter.
CDNS's full-year Zacks Consensus Estimates are calling for earnings of $7.94 per share and revenue of $6.2 billion. These results would represent year-over-year changes of +11.2% and +17.11%, respectively.
Investors might also notice recent changes to analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
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.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.14% upward. Cadence Design Systems currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Cadence Design Systems is currently trading at a Forward P/E ratio of 52.46. For comparison, its industry has an average Forward P/E of 16.28, which means Cadence Design Systems is trading at a premium to the group.
Also, we should mention that CDNS has a PEG ratio of 3.87. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.66.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 151, putting it in the bottom 39% of all 250+ industries.
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.
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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Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).