Cadence Design Systems (CDNS) closed the most recent trading day at $319.60, moving +1.04% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.06%. Meanwhile, the Dow experienced a rise of 0.41%, and the technology-dominated Nasdaq saw a decrease of 0.39%.
The maker of hardware and software products for validating chip designs's shares have seen an increase of 7.75% over the last month, not keeping up with the Computer and Technology sector's gain of 9.6% and outstripping the S&P 500's gain of 5.88%.
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 July 28, 2025. The company is predicted to post an EPS of $1.57, indicating a 22.66% growth compared to the equivalent quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $1.26 billion, indicating a 18.67% growth compared to the corresponding quarter of the prior year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.77 per share and a revenue of $5.2 billion, signifying shifts of +13.4% and +11.96%, respectively, from the last year.
Any recent changes to analyst estimates for Cadence Design Systems should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 past month, the Zacks Consensus EPS estimate has moved 0.02% lower. Cadence Design Systems currently has a Zacks Rank of #4 (Sell).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 46.72. This signifies a premium in comparison to the average Forward P/E of 24.7 for its industry.
Investors should also note that CDNS has a PEG ratio of 3.48 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Computer - Software industry stood at 2.32 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 47, this industry ranks in the top 20% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow CDNS in the coming trading sessions, be sure to utilize Zacks.com.
Want 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 ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
