Cadence Design Systems (CDNS) Gains As Market Dips: What You Should Know
Cadence Design Systems (CDNS) closed the most recent trading day at $213.73, moving +0.03% from the previous trading session. This change outpaced the S&P 500's 0.6% loss on the day. Meanwhile, the Dow lost 0.33%, and the Nasdaq, a tech-heavy index, lost 2.87%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had gained 4.74% over the past month, outpacing the Computer and Technology sector's gain of 3.62% and lagging the S&P 500's gain of 6.22% in that time.
Investors will be hoping for strength from Cadence Design Systems as it approaches its next earnings release, which is expected to be April 24, 2023. In that report, analysts expect Cadence Design Systems to post earnings of $1.25 per share. This would mark year-over-year growth of 6.84%. Our most recent consensus estimate is calling for quarterly revenue of $1.01 billion, up 11.52% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.97 per share and revenue of $4.04 billion, which would represent changes of +16.39% and +13.39%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Cadence Design Systems. Recent revisions tend to reflect the latest near-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Cadence Design Systems currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Cadence Design Systems is currently trading at a Forward P/E ratio of 43.02. Its industry sports an average Forward P/E of 27.63, so we one might conclude that Cadence Design Systems is trading at a premium comparatively.
We can also see that CDNS currently has a PEG ratio of 2.25. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 2.18 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 104, which puts it in the top 42% 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.
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Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
