Cadence Design Systems (CDNS) closed the most recent trading day at $291.00, moving +2.64% from the previous trading session. This change outpaced the S&P 500's 0.47% gain on the day. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq gained 0.9%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 13.38% over the past month, lagging the Computer and Technology sector's loss of 1.96% and the S&P 500's loss of 0.16%.
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%. Our most recent consensus estimate is calling for quarterly revenue of $1.42 billion, up 5.02% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $7.05 per share and revenue of $5.28 billion, which would represent changes of +18.09% and +13.77%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Cadence Design Systems. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
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 past month, the Zacks Consensus EPS estimate has moved 0.29% higher. At present, Cadence Design Systems boasts a Zacks Rank of #4 (Sell).
Looking at its valuation, Cadence Design Systems is holding a Forward P/E ratio of 35.33. This valuation marks a premium compared to its industry average Forward P/E of 18.38.
Meanwhile, CDNS's PEG ratio is currently 2.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Software was holding an average PEG ratio of 1.5 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 39% 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.
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
