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Cadence Design Systems (CDNS) closed the most recent trading day at $254.31, moving -0.93% from the previous trading session. The stock's change was less than the S&P 500's daily gain of 0.55%. Meanwhile, the Dow gained 1.01%, and the Nasdaq, a tech-heavy index, lost 0.14%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 2.47% over the past month. This has outpaced the Computer and Technology sector's loss of 8.88% and the S&P 500's loss of 6.22% in that time.
The investment community will be paying close attention to the earnings performance of Cadence Design Systems in its upcoming release. In that report, analysts expect Cadence Design Systems to post earnings of $1.49 per share. This would mark year-over-year growth of 27.35%. Meanwhile, our latest consensus estimate is calling for revenue of $1.24 billion, up 22.76% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $6.71 per share and revenue of $5.19 billion, which would represent changes of +12.4% and +11.76%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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. Within the past 30 days, our consensus EPS projection has moved 0.28% lower. Cadence Design Systems currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, Cadence Design Systems is holding a Forward P/E ratio of 38.28. For comparison, its industry has an average Forward P/E of 24.26, which means Cadence Design Systems is trading at a premium to the group.
We can also see that CDNS currently has a PEG ratio of 2.73. 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 the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 2.03.