Here's Why Cadence Design Systems (CDNS) Fell More Than Broader Market
Cadence Design Systems (CDNS) closed the most recent trading day at $269.69, moving -1.86% from the previous trading session. The stock's change was less than the S&P 500's daily loss of 0.29%. Meanwhile, the Dow experienced a drop of 0.25%, and the technology-dominated Nasdaq saw a decrease of 0.31%.
The the stock of maker of hardware and software products for validating chip designs has fallen by 2.34% in the past month, lagging the Computer and Technology sector's loss of 1.17% and the S&P 500's gain of 1.57%.
The upcoming earnings release of Cadence Design Systems will be of great interest to investors. The company is expected to report EPS of $1.44, up 14.29% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $1.18 billion, showing a 15.7% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $5.87 per share and a revenue of $4.63 billion, demonstrating changes of +13.98% and +13.18%, respectively, from the preceding year.
Investors should also pay attention to any latest changes in analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Currently, Cadence Design Systems is carrying a Zacks Rank of #3 (Hold).
Looking at its valuation, Cadence Design Systems is holding a Forward P/E ratio of 46.79. This represents a premium compared to its industry's average Forward P/E of 28.74.
We can additionally observe that CDNS currently boasts a PEG ratio of 2.67. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.38.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting it in the top 30% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
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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Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report