Cadence Design Systems (CDNS) closed at $327.31 in the latest trading session, marking a +2.67% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.65%. On the other hand, the Dow registered a gain of 0.48%, and the technology-centric Nasdaq increased by 0.82%.
The stock of maker of hardware and software products for validating chip designs has fallen by 4.96% in the past month, lagging the Computer and Technology sector's loss of 1.6% and the S&P 500's gain of 1.15%.
Investors will be eagerly watching for the performance of Cadence Design Systems in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 17, 2026. On that day, Cadence Design Systems is projected to report earnings of $1.9 per share, which would represent year-over-year growth of 1.06%. Simultaneously, our latest consensus estimate expects the revenue to be $1.42 billion, showing a 5.02% escalation compared to the year-ago quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.06 per share and a revenue of $5.28 billion, indicating changes of +18.26% and 0%, respectively, from the former year.
Any recent changes to analyst estimates for Cadence Design Systems should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 remained stagnant. As of now, Cadence Design Systems holds a Zacks Rank of #2 (Buy).
Looking at its valuation, Cadence Design Systems is holding a Forward P/E ratio of 39.81. This represents a premium compared to its industry average Forward P/E of 22.72.
It is also worth noting that CDNS currently has a PEG ratio of 2.9. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Software industry currently had an average PEG ratio of 1.91 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 90, putting it in the top 37% 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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Cadence Design Systems, Inc. (CDNS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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