Cadence Design Systems (CDNS) Outpaces Stock Market Gains: What You Should Know
Cadence Design Systems (CDNS) closed at $66.15 in the latest trading session, marking a +1.04% move from the prior day. This move outpaced the S&P 500's daily gain of 0.29%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.3%.
Coming into today, shares of the maker of hardware and software products for validating chip designs had lost 3.34% in the past month. In that same time, the Computer and Technology sector gained 3.47%, while the S&P 500 gained 2.99%.
Wall Street will be looking for positivity from CDNS as it approaches its next earnings report date. In that report, analysts expect CDNS to post earnings of $0.51 per share. This would mark year-over-year growth of 4.08%. Meanwhile, our latest consensus estimate is calling for revenue of $574.77 million, up 7.94% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $2.15 per share and revenue of $2.33 billion, which would represent changes of +14.97% and +8.83%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for CDNS. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. CDNS is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, CDNS is currently trading at a Forward P/E ratio of 30.45. Its industry sports an average Forward P/E of 27.96, so we one might conclude that CDNS is trading at a premium comparatively.
Meanwhile, CDNS's PEG ratio is currently 3.05. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software industry currently had an average PEG ratio of 2.05 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 65, which puts it in the top 26% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.