Cadence Design Systems (CDNS - Free Report) closed the most recent trading day at $64.22, moving +0.86% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.46%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.59%.
Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 8.34% over the past month. This has outpaced the Computer and Technology sector's gain of 5.33% and the S&P 500's gain of 3.24% in that time.
Investors will be hoping for strength from CDNS as it approaches its next earnings release. In that report, analysts expect CDNS to post earnings of $0.50 per share. This would mark year-over-year growth of 25%. Our most recent consensus estimate is calling for quarterly revenue of $567.11 million, up 9.63% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.04 per share and revenue of $2.28 billion. These totals would mark changes of +9.09% and +6.74%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for CDNS. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 currently sporting a Zacks Rank of #1 (Strong Buy).
In terms of valuation, CDNS is currently trading at a Forward P/E ratio of 31.16. This valuation marks a premium compared to its industry's average Forward P/E of 30.28.
We can also see that CDNS currently has a PEG ratio of 2.6. 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. The Computer - Software industry currently had an average PEG ratio of 2.16 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 22, putting it in the top 9% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.