In the latest close session, Cadence Design Systems (CDNS) was down 2.8% at $284.32. The stock's performance was behind the S&P 500's daily loss of 0.37%. Meanwhile, the Dow lost 0.18%, and the Nasdaq, a tech-heavy index, lost 0.84%.
The stock of maker of hardware and software products for validating chip designs has risen by 4.55% in the past month, leading the Computer and Technology sector's loss of 2.83% and the S&P 500's loss of 3.7%.
Analysts and investors alike will be keeping a close eye on the performance of Cadence Design Systems in its upcoming earnings disclosure. The company's upcoming EPS is projected at $1.89, signifying a 20.38% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.43 billion, up 15.02% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $8.11 per share and a revenue of $5.99 billion, representing changes of +13.59% and +13%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cadence Design Systems. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 0.07% fall in the Zacks Consensus EPS estimate. Cadence Design Systems is currently a Zacks Rank #3 (Hold).
Investors should also note Cadence Design Systems's current valuation metrics, including its Forward P/E ratio of 36.08. This signifies a premium in comparison to the average Forward P/E of 17.68 for its industry.
Investors should also note that CDNS has a PEG ratio of 2.82 right now. 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 1.43 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 43, finds itself in the top 18% echelons 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
