Cadence Design Systems (CDNS) Dips More Than Broader Markets: What You Should Know
Cadence Design Systems (CDNS) closed the most recent trading day at $169.70, moving -0.95% from the previous trading session. This move lagged the S&P 500's daily loss of 0.2%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq lost 0.12%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 2.09% over the past month. This has outpaced the Computer and Technology sector's loss of 4.64% and the S&P 500's loss of 3.29% in that time.
Wall Street will be looking for positivity from Cadence Design Systems as it approaches its next earnings report date. On that day, Cadence Design Systems is projected to report earnings of $0.97 per share, which would represent year-over-year growth of 21.25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $869.88 million, up 15.84% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.12 per share and revenue of $3.5 billion, which would represent changes of +25.23% and +17.11%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Cadence Design Systems. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 0.16% higher. Cadence Design Systems is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, Cadence Design Systems currently has a Forward P/E ratio of 41.6. For comparison, its industry has an average Forward P/E of 23.21, which means Cadence Design Systems is trading at a premium to the group.
Also, we should mention that CDNS has a PEG ratio of 2.35. 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 industry currently had an average PEG ratio of 2.04 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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