Cadence Design Systems (CDNS) Suffers a Larger Drop Than the General Market: Key Insights
In the latest trading session, Cadence Design Systems (CDNS) closed at $305.74, marking a -0.93% move from the previous day. This change lagged the S&P 500's 0.11% loss on the day. Elsewhere, the Dow saw an upswing of 0.12%, while the tech-heavy Nasdaq depreciated by 0.41%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 1.07% over the past month, lagging the Computer and Technology sector's gain of 1.42% and the S&P 500's gain of 2.7% in that time.
Investors will be eagerly watching for the performance of Cadence Design Systems in its upcoming earnings disclosure. In that report, analysts expect Cadence Design Systems to post earnings of $1.13 per share. This would mark a year-over-year decline of 12.4%. Simultaneously, our latest consensus estimate expects the revenue to be $1.02 billion, showing a 0.53% drop compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $5.93 per share and a revenue of $4.59 billion, demonstrating changes of +15.15% and +12.24%, respectively, from the preceding year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cadence Design Systems. Such recent modifications usually signify the changing landscape 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 suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 4.83% higher. Cadence Design Systems presently features a Zacks Rank of #2 (Buy).
Investors should also note Cadence Design Systems's current valuation metrics, including its Forward P/E ratio of 52. This valuation marks a premium compared to its industry's average Forward P/E of 31.09.
Meanwhile, CDNS's PEG ratio is currently 3.05. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 2.37.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 46, positioning it in the top 19% 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
