Investors are always looking for stocks that are poised to beat at earnings season and Cadence Design Systems, Inc. CDNS may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because Cadence Design is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pretty good indicator of some favorable trends underneath the surface for CDNS in this report.
In fact, the Most Accurate Estimate for the current quarter is currently higher than the broader Zacks Consensus Estimate of 50 cents per share. This suggests that analysts have very recently bumped up their estimates for CDNS, giving the stock a Zacks Earnings ESP of +0.50% heading into earnings season.
Cadence Design Systems, Inc. Price and EPS Surprise
Cadence Design Systems, Inc. Price and EPS Surprise | Cadence Design Systems, Inc. Quote
Why is this Important?
A positive reading for the Zacks Earnings ESP has proven to be very powerful in producing both positive surprises, and outperforming the market. Our recent 10-year backtest shows that stocks that have a positive Earnings ESP and a Zacks Rank #3 (Hold) or better show a positive surprise nearly 70% of the time, and have returned over 28% on average in annual returns (see more Top Earnings ESP stocks here).
Given that CDNS has a Zacks Rank #1 (Strong Buy) and an ESP in positive territory, investors might want to consider this stock ahead of earnings. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearly, recent earnings estimate revisions suggest that good things are ahead for Cadence Design, and that a beat might be in the cards for the upcoming report.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>
Is your investment advisor fumbling your financial future?
See how you can more effectively safeguard your retirement with a new Special Report, “4 Warning Signs Your Investment Advisor Might Be Sabotaging Your Financial Future.” Click to get your free report.
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
To read this article on Zacks.com click here.