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Cadence Design Systems (CDNS) Stock Declines While Market Improves: Some Information for Investors

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Cadence Design Systems (CDNS - Free Report) closed at $314.58 in the latest trading session, marking a -1.09% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.32%. At the same time, the Dow added 0.53%, and the tech-heavy Nasdaq gained 0.26%.

Shares of the maker of hardware and software products for validating chip designs have appreciated by 6.37% over the course of the past month, underperforming the Computer and Technology sector's gain of 7.22%, and outperforming the S&P 500's gain of 4.51%.

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 earnings report is set to go public on July 28, 2025. It is anticipated that the company will report an EPS of $1.57, marking a 22.66% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.26 billion, showing a 18.8% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $6.77 per share and revenue of $5.2 billion. These totals would mark changes of +13.4% and +11.99%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Cadence Design Systems. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Cadence Design Systems is currently sporting a Zacks Rank of #3 (Hold).

Looking at valuation, Cadence Design Systems is presently trading at a Forward P/E ratio of 46.96. This signifies a premium in comparison to the average Forward P/E of 25.34 for its industry.

It's also important to note that CDNS currently trades at a PEG ratio of 3.49. 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. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.37.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 36, this industry ranks in the top 15% 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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