In the latest close session, Cadence Design Systems (CDNS) was up +2.07% at $303.69. The stock outpaced the S&P 500's daily gain of 0.8%. Elsewhere, the Dow gained 0.94%, while the tech-heavy Nasdaq added 0.97%.
Coming into today, shares of the maker of hardware and software products for validating chip designs had gained 3.09% in the past month. In that same time, the Computer and Technology sector gained 8.5%, while the S&P 500 gained 5.12%.
The investment community will be closely monitoring the performance of Cadence Design Systems in its forthcoming earnings report. The company is expected to report EPS of $1.57, up 22.66% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $1.26 billion, reflecting a 18.8% rise from the equivalent quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.77 per share and a revenue of $5.2 billion, signifying shifts of +13.4% and +11.99%, respectively, from the last 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. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent 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, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Cadence Design Systems currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Cadence Design Systems is presently being traded at a Forward P/E ratio of 43.93. For comparison, its industry has an average Forward P/E of 25.71, which means Cadence Design Systems is trading at a premium to the group.
Meanwhile, CDNS's PEG ratio is currently 3.26. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. CDNS's industry had an average PEG ratio of 2.44 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 27, positioning it in the top 11% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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
