Cadence Design Systems (CDNS) closed the most recent trading day at $329.64, moving +1.08% from the previous trading session. The stock's performance was ahead of the S&P 500's daily gain of 1.07%. Meanwhile, the Dow experienced a rise of 1.12%, and the technology-dominated Nasdaq saw an increase of 1.37%.
The maker of hardware and software products for validating chip designs's shares have seen a decrease of 12.65% over the last month, not keeping up with the Computer and Technology sector's gain of 2.68% and the S&P 500's gain of 1.08%.
Market participants will be closely following the financial results of Cadence Design Systems in its upcoming release. The company plans to announce its earnings on October 27, 2025. In that report, analysts expect Cadence Design Systems to post earnings of $1.79 per share. This would mark year-over-year growth of 9.15%. Meanwhile, our latest consensus estimate is calling for revenue of $1.32 billion, up 8.96% from the prior-year quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6.91 per share and revenue of $5.25 billion, indicating changes of +15.75% and +13.06%, respectively, compared to the previous year.
Any recent changes to analyst estimates for Cadence Design Systems should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Cadence Design Systems currently has a Zacks Rank of #3 (Hold).
Looking at valuation, Cadence Design Systems is presently trading at a Forward P/E ratio of 47.22. Its industry sports an average Forward P/E of 27.14, so one might conclude that Cadence Design Systems is trading at a premium comparatively.
Investors should also note that CDNS has a PEG ratio of 3.39 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software industry had an average PEG ratio of 2.07 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 151, positioning it in the bottom 39% of all 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.
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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Cadence Design Systems, Inc. (CDNS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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