In the latest market close, Cadence Design Systems (CDNS – Free Report) reached $233.82, with a +0.4% movement compared to the previous day. This change outpaced the S&P 500’s 0.23% loss on the day. Elsewhere, the Dow saw a downswing of 0.91%, while the tech-heavy Nasdaq appreciated by 0.1%.
Shares of the maker of hardware and software products for validating chip designs witnessed a loss of 4.25% over the previous month, beating the performance of the Computer and Technology sector with its loss of 16.18% and the S&P 500’s loss of 12.13%.
The investment community will be closely monitoring the performance of Cadence Design Systems in its forthcoming earnings report. The company is forecasted to report an EPS of $1.49, showcasing a 27.35% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $1.24 billion, indicating a 22.76% upward movement from the same quarter last year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $6.71 per share and revenue of $5.19 billion. These totals would mark changes of +12.4% and +11.82%, respectively, from last year.
Investors should also pay attention to any latest changes in analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.25% lower. Cadence Design Systems is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Cadence Design Systems is holding a Forward P/E ratio of 34.72. This expresses a premium compared to the average Forward P/E of 22.6 of its industry.
Investors should also note that CDNS has a PEG ratio of 2.48 right now. 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 was holding an average PEG ratio of 1.95 at yesterday’s closing price.
The Computer – Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 68, placing it within the top 28% of over 250 industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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