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Cadence Design Systems (CDNS) Rises Higher Than Market: Key Facts

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Cadence Design Systems (CDNS - Free Report) closed the latest trading day at $296.18, indicating a +0.6% change from the previous session's end. This change outpaced the S&P 500's 0.26% gain on the day. At the same time, the Dow added 0.18%, and the tech-heavy Nasdaq gained 0.35%.

Shares of the maker of hardware and software products for validating chip designs have appreciated by 2.41% over the course of the past month, underperforming the Computer and Technology sector's gain of 6.38% and the S&P 500's gain of 3.25%.

The upcoming earnings release of Cadence Design Systems will be of great interest to investors. The company is predicted to post an EPS of $1.25, indicating a 2.46% growth compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.05 billion, up 7.35% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $5.93 per share and a revenue of $4.59 billion, demonstrating changes of +15.15% and +12.14%, respectively, from the preceding year.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Cadence Design Systems. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been a 0.14% fall in the Zacks Consensus EPS estimate. Cadence Design Systems presently features a Zacks Rank of #3 (Hold).

With respect to valuation, Cadence Design Systems is currently being traded at a Forward P/E ratio of 49.64. This indicates a premium in contrast to its industry's Forward P/E of 26.86.

Meanwhile, CDNS's PEG ratio is currently 2.9. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.3.

The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 75, positioning it in the top 30% of all 250+ industries.

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.

Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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