Cadence Design Systems (CDNS - Free Report) closed the most recent trading day at $70, moving -0.86% from the previous trading session. This change lagged the S&P 500's 0.09% gain on the day. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq lost 0.17%.
Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 1.09% over the past month, lagging the Computer and Technology sector's gain of 5.65% and the S&P 500's gain of 4.92% 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 $0.51 per share. This would mark year-over-year growth of 4.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $573.81 million, up 7.76% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.15 per share and revenue of $2.33 billion. These totals would mark changes of +14.97% and +8.78%, respectively, from last year.
Investors should also note any 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 remained stagnant. CDNS is currently a Zacks Rank #2 (Buy).
Looking at its valuation, CDNS is holding a Forward P/E ratio of 32.84. For comparison, its industry has an average Forward P/E of 29.51, which means CDNS is trading at a premium to the group.
Meanwhile, CDNS's PEG ratio is currently 3.28. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.1 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% 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.