Cadence Design Systems (CDNS) ended the recent trading session at $310.10, displaying a momentum of +1.81% over the previous day’s closing price. The move outpaced the S&P 500’s daily gain of 0.74%. Meanwhile, the Dow was down 0.01% and the tech-dominated Nasdaq was up 1.68%.
Shares of the maker of chip design verification hardware and software products lost 0.53% from the previous month, lagging behind the Computer & Technology sector’s 0.95% gain and the S&P 500’s 0.8% gain.
The investment community will be closely watching Cadence Design Systems’ performance in its upcoming earnings report. The company is scheduled to announce its earnings on April 22nd, 2024. The company is projected to report EPS of $1.13, which represents a 12.4% year-over-year decline. Meanwhile, the latest consensus estimate calls for revenue of $1.01 billion, indicating a decrease of 0.75% compared to the same quarter last year.
For the full fiscal year, Zacks Consensus Estimates call for earnings of $5.94 per share and revenue of $4.59 billion, indicating year-over-year changes of +15.34% and +12.21%, respectively.
Additionally, investors should keep an eye on any recent analyst forecast revisions for Cadence Design Systems. These latest adjustments often reflect the changing dynamics of short-term business patterns. As a result, we can interpret positive revisions of estimates as a good sign for the company’s business prospects.
Our research shows that these adjustments in valuations are directly related to imminent stock price performance. To benefit from this, we developed Zacks Rank, a proprietary model that takes these valuation changes into account and provides an effective rating system.
In the range of no. 1 (strong buy) to no. 5 (strong sell), the Zacks Rank system has a proven, externally audited track record of outperformance, with the stock’s no. 1 that have returned an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS Estimate has moved up 0.27%. Cadence Design Systems currently holds a Zacks Rank #3 (Hold).
Looking at valuation, Cadence Design Systems currently trades at a P/E ratio of 51.32. In comparison, its industry has an average Forward P/E of 30.08, meaning Cadence Design Systems trades at a premium to the group.
Investors should also note that CDNS currently has a PEG ratio of 3.01. Comparable to the generally accepted P/E ratio, the PEG ratio is also responsible for a company’s projected earnings growth. CDNS’s industry average PEG ratio was 2.28 as of yesterday’s close.
The computer software industry is part of the computer and technology sector. With its current Zacks Industry Rank of 57, this industry ranks in the top 23% of all industries, with 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 those groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.
Don’t forget to apply Zacks.com to track these and other stock performance metrics during the upcoming trading sessions.
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