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Cadence Design Systems (CDNS) closed at $300.46 in the latest trading session, marking a -0.46% move from the prior day. This move lagged the S&P 500's daily loss of 0.43%. Meanwhile, the Dow lost 0.07%, and the Nasdaq, a tech-heavy index, lost 0.9%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 2.71% over the past month, lagging the Computer and Technology sector's gain of 2.86% and the S&P 500's loss of 1.98% in that time.
Investors will be eagerly watching for the performance of Cadence Design Systems in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.82, indicating a 31.88% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.35 billion, indicating a 26.13% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $5.91 per share and revenue of $4.63 billion, which would represent changes of +14.76% and +13.28%, respectively, from the prior year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 past month, the Zacks Consensus EPS estimate has remained steady. As of now, Cadence Design Systems holds a Zacks Rank of #2 (Buy).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 51.04. This represents a premium compared to its industry's average Forward P/E of 32.22.
Meanwhile, CDNS's PEG ratio is currently 3.29. 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. The Computer - Software was holding an average PEG ratio of 2.27 at yesterday's closing price.