Cadence Design Systems (CDNS) closed the most recent trading day at $322.00, moving +1.15% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.5%. On the other hand, the Dow registered a gain of 0.64%, and the technology-centric Nasdaq increased by 0.43%.
The maker of hardware and software products for validating chip designs's stock has dropped by 0.18% in the past month, falling short of the Computer and Technology sector's loss of 0.15% and the S&P 500's gain of 0.18%.
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 February 17, 2026. In that report, analysts expect Cadence Design Systems to post earnings of $1.9 per share. This would mark year-over-year growth of 1.06%. At the same time, our most recent consensus estimate is projecting a revenue of $1.42 billion, reflecting a 5.02% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $7.06 per share and revenue of $5.28 billion, indicating changes of +18.26% and 0%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Cadence Design Systems. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, Cadence Design Systems holds a Zacks Rank of #3 (Hold).
Digging into valuation, Cadence Design Systems currently has a Forward P/E ratio of 39.75. This represents a premium compared to its industry average Forward P/E of 21.86.
It is also worth noting that CDNS currently has a PEG ratio of 2.89. 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 1.82 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 77, putting it in the top 32% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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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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