Cadence Design Systems (CDNS) closed at $289.19 in the latest trading session, marking a -2.42% move from the prior day. The stock fell short of the S&P 500, which registered a gain of 0.54% for the day. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 0.56%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 4.52% over the past month, lagging the Computer and Technology sector's gain of 0.44% and the S&P 500's gain of 0.74%.
The investment community will be closely monitoring the performance of Cadence Design Systems in its forthcoming earnings report. The company is scheduled to release its earnings on February 17, 2026. The company's earnings per share (EPS) are projected to be $1.9, reflecting a 1.06% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $1.42 billion, up 5.02% from the year-ago period.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.05 per share and a revenue of $5.28 billion, indicating changes of +18.09% and 0%, respectively, from the former year.
Investors might also notice recent changes to analyst estimates for Cadence Design Systems. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. Cadence Design Systems is currently a Zacks Rank #4 (Sell).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 37.02. Its industry sports an average Forward P/E of 19.7, so one might conclude that Cadence Design Systems is trading at a premium comparatively.
We can also see that CDNS currently has a PEG ratio of 2.69. 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. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.6.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 93, positioning it in the top 38% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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