In the latest trading session, Cadence Design Systems (CDNS) closed at $228.78, marking a -1.53% move from the previous day. This change lagged the S&P 500's daily gain of 0.24%. At the same time, the Dow added 0.03%, and the tech-heavy Nasdaq gained 5.73%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 13.02% over the past month. This has outpaced the Computer and Technology sector's gain of 10.73% and the S&P 500's gain of 3.56% in that time.
Cadence Design Systems will be looking to display strength as it nears its next earnings release. In that report, analysts expect Cadence Design Systems to post earnings of $1.17 per share. This would mark year-over-year growth of 8.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $971.66 million, up 13.31% from the year-ago period.
CDNS's full-year Zacks Consensus Estimates are calling for earnings of $5 per share and revenue of $4.05 billion. These results would represent year-over-year changes of +17.1% and +13.74%, respectively.
It is also important to note the recent changes to analyst estimates for Cadence Design Systems. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. Cadence Design Systems is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, Cadence Design Systems currently has a Forward P/E ratio of 46.44. This represents a premium compared to its industry's average Forward P/E of 28.47.
It is also worth noting that CDNS currently has a PEG ratio of 2.38. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 2.14 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 111, putting it in the top 45% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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