Cadence Design Systems (CDNS) closed the most recent trading day at $150.03, moving -0.59% from the previous trading session. This change was narrower than the S&P 500’s daily loss of 0.88%. Elsewhere, the Dow lost 0.82%, while the tech-heavy Nasdaq added 0.08%.
Prior to today’s trading, shares of the maker of hardware and software products for validating chip designs had lost 1.5% over the past month. This has was narrower than the Computer and Technology sector’s loss of 7.53% and the S&P 500’s loss of 8.06% in that time.
Cadence Design Systems will be looking to display strength as it nears its next earnings release. On that day, Cadence Design Systems is projected to report earnings of $0.97 per share, which would represent year-over-year growth of 12.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $837.05 million, up 14.93% from the year-ago period.
CDNS’s full-year Zacks Consensus Estimates are calling for earnings of $3.94 per share and revenue of $3.4 billion. These results would represent year-over-year changes of +19.76% and +13.81%, respectively.
Investors should also note any recent changes to analyst estimates for Cadence Design Systems. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Cadence Design Systems is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Cadence Design Systems has a Forward P/E ratio of 38.34 right now. For comparison, its industry has an average Forward P/E of 26.51, 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 2.25. 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 industry currently had an average PEG ratio of 2.19 as of yesterday’s close.
The Computer – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 176, putting it in the bottom 31% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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