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In the latest trading session, Cadence Design Systems (CDNS) closed at $296.16, marking a +0.72% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 1.04%. Meanwhile, the Dow gained 0.77%, and the Nasdaq, a tech-heavy index, added 1.51%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had lost 2.22% over the past month. This has lagged the Computer and Technology sector's gain of 1.48% and the S&P 500's gain of 3.92% in that time.
The investment community will be closely monitoring the performance of Cadence Design Systems in its forthcoming earnings report. The company is scheduled to release its earnings on February 18, 2025. On that day, Cadence Design Systems is projected to report earnings of $1.82 per share, which would represent year-over-year growth of 31.88%. Our most recent consensus estimate is calling for quarterly revenue of $1.35 billion, up 26.13% from the year-ago period.
It's also important for investors to be aware of any recent modifications to analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.58% lower. Cadence Design Systems is currently sporting a Zacks Rank of #4 (Sell).
With respect to valuation, Cadence Design Systems is currently being traded at a Forward P/E ratio of 43.22. This denotes a premium relative to the industry's average Forward P/E of 29.78.
Investors should also note that CDNS has a PEG ratio of 2.78 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Computer - Software stocks are, on average, holding a PEG ratio of 2.18 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 131, this industry ranks in the bottom 48% of all industries, numbering over 250.