In the latest trading session, Cadence Design Systems (CDNS) closed at $66.92, marking a -1.28% move from the previous day. This change lagged the S&P 500's daily of 0%. Meanwhile, the Dow lost 0.19%, and the Nasdaq, a tech-heavy index, added 0.07%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 2.73% over the past month, lagging the Computer and Technology sector's gain of 4.17% and the S&P 500's gain of 4.25% in that time.
CDNS will be looking to display strength as it nears its next earnings release. On that day, CDNS is projected to report earnings of $0.51 per share, which would represent year-over-year growth of 4.08%. Meanwhile, our latest consensus estimate is calling for revenue of $574.77 million, up 7.94% from the prior-year quarter.
CDNS's full-year Zacks Consensus Estimates are calling for earnings of $2.15 per share and revenue of $2.33 billion. These results would represent year-over-year changes of +14.97% and +8.83%, respectively.
Any recent changes to analyst estimates for CDNS should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. CDNS currently has a Zacks Rank of #2 (Buy).
Digging into valuation, CDNS currently has a Forward P/E ratio of 31.53. Its industry sports an average Forward P/E of 29.5, so we one might conclude that CDNS is trading at a premium comparatively.
It is also worth noting that CDNS currently has a PEG ratio of 3.15. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 71, putting it in the top 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
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