In the latest trading session, Cadence Design Systems (CDNS) closed at $293.29, marking a -1.6% move from the previous day. The stock's change was less than the S&P 500's daily loss of 0.21%. Meanwhile, the Dow experienced a drop of 0.07%, and the technology-dominated Nasdaq saw an increase of 0.01%.
Coming into today, shares of the maker of hardware and software products for validating chip designs had gained 2.42% in the past month. In that same time, the Computer and Technology sector lost 3.04%, while the S&P 500 lost 2.26%.
Market participants will be closely following the financial results of Cadence Design Systems in its upcoming release. In that report, analysts expect Cadence Design Systems to post earnings of $1.89 per share. This would mark year-over-year growth of 20.38%. In the meantime, our current consensus estimate forecasts the revenue to be $1.43 billion, indicating a 15.02% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $8.1 per share and revenue of $5.98 billion, which would represent changes of +13.45% and +12.9%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Cadence Design Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.46% lower. Cadence Design Systems is currently sporting a Zacks Rank of #3 (Hold).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 36.79. This expresses a premium compared to the average Forward P/E of 18.56 of its industry.
It is also worth noting that CDNS currently has a PEG ratio of 2.87. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.55.
The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 76, placing it within the top 32% of over 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next 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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