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Cadence Design Systems (CDNS) closed at $143.09 in the latest trading session, marking a +1.42% move from the prior day. This change outpaced the S&P 500's 0.22% gain on the day. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, added 0.22%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had lost 2.39% over the past month. This has was narrower than the Computer and Technology sector's loss of 9.55% and the S&P 500's loss of 10.02% in that time.
Wall Street will be looking for positivity from Cadence Design Systems as it approaches its next earnings report date. The company is expected to report EPS of $0.97, up 12.79% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $837.05 million, up 14.93% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.94 per share and revenue of $3.4 billion, which would represent changes of +19.76% and +13.81%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Cadence Design Systems. These revisions help to show the ever-changing nature of 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Cadence Design Systems is currently a Zacks Rank #1 (Strong Buy).
Digging into valuation, Cadence Design Systems currently has a Forward P/E ratio of 36.35. This valuation marks a premium compared to its industry's average Forward P/E of 25.9.
Also, we should mention that CDNS has a PEG ratio of 2.14. 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 was holding an average PEG ratio of 2.11 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 146, putting it in the bottom 43% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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.
To follow CDNS in the coming trading sessions, be sure to utilize Zacks.com.