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Cadence Design Systems (CDNS) closed the most recent trading day at $269.11, moving +0.73% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.16%. On the other hand, the Dow registered a gain of 0.01%, and the technology-centric Nasdaq increased by 0.46%.
Shares of the maker of hardware and software products for validating chip designs witnessed a gain of 5.61% over the previous month, beating the performance of the Computer and Technology sector with its loss of 5.94% and the S&P 500's loss of 3.59%.
The upcoming earnings release of Cadence Design Systems will be of great interest to investors. On that day, Cadence Design Systems is projected to report earnings of $1.49 per share, which would represent year-over-year growth of 27.35%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.24 billion, indicating a 22.76% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates project earnings of $6.71 per share and a revenue of $5.19 billion, demonstrating changes of +12.4% and +11.76%, respectively, from the preceding year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cadence Design Systems. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 witnessed a 0.18% decrease. Right now, Cadence Design Systems possesses a Zacks Rank of #3 (Hold).
Investors should also note Cadence Design Systems's current valuation metrics, including its Forward P/E ratio of 39.84. Its industry sports an average Forward P/E of 26.81, so one might conclude that Cadence Design Systems is trading at a premium comparatively.
It is also worth noting that CDNS currently has a PEG ratio of 2.84. 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. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 2.17.