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Cadence Design Systems (CDNS) ended the recent trading session at $298.90, demonstrating a -0.61% swing from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 0.21%. Meanwhile, the Dow experienced a drop of 0.16%, and the technology-dominated Nasdaq saw a decrease of 0.89%.
The maker of hardware and software products for validating chip designs's stock has dropped by 0.17% in the past month, exceeding the Computer and Technology sector's loss of 2.15% and the S&P 500's loss of 1.56%.
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. The company's earnings per share (EPS) are projected to be $1.82, reflecting a 31.88% increase from the same 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.
It's also important for investors to be aware of any recent modifications to analyst estimates for Cadence Design Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. At present, Cadence Design Systems boasts a Zacks Rank of #3 (Hold).
From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 44. This expresses a premium compared to the average Forward P/E of 30.43 of its industry.
It is also worth noting that CDNS currently has a PEG ratio of 2.84. 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. CDNS's industry had an average PEG ratio of 2.37 as of yesterday's close.