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Cadence Design Systems (CDNS) Stock Slides as Market Rises: Facts to Know Before You Trade

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Cadence Design Systems (CDNS - Free Report) closed at $286.15 in the latest trading session, marking a -0.06% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.11%. Meanwhile, the Dow experienced a drop of 0.3%, and the technology-dominated Nasdaq saw an increase of 0.56%.

Shares of the maker of hardware and software products for validating chip designs have appreciated by 1.66% over the course of the past month, underperforming the Computer and Technology sector's gain of 7.61% and the S&P 500's gain of 5.06%.

The upcoming earnings release of Cadence Design Systems will be of great interest to investors. It is anticipated that the company will report an EPS of $1.25, marking a 2.46% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $1.05 billion, reflecting a 7.35% rise from the equivalent quarter last year.

CDNS's full-year Zacks Consensus Estimates are calling for earnings of $5.93 per share and revenue of $4.59 billion. These results would represent year-over-year changes of +15.15% and +12.14%, respectively.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cadence Design Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. Over the past month, the Zacks Consensus EPS estimate has shifted 0.14% downward. As of now, Cadence Design Systems holds a Zacks Rank of #3 (Hold).

From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 48.27. This valuation marks a premium compared to its industry's average Forward P/E of 27.56.

It is also worth noting that CDNS currently has a PEG ratio of 2.82. 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 had an average PEG ratio of 2.34 as trading concluded yesterday.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 58, this industry ranks in the top 24% of all industries, numbering over 250.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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

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