Cadence Design Systems (CDNS) Rises But Trails Market: What Investors Should Know

In the latest trading session, Cadence Design Systems (CDNS) closed at $296.80, marking a +1.1% move from the previous day. This move lagged the S&P 500's daily gain of 1.11%. Elsewhere, the Dow saw an upswing of 1.19%, while the tech-heavy Nasdaq appreciated by 1.43%. The stock of maker of hardware and software products for validating chip designs has fallen by 6.96% in the past month, lagging the Computer and Technology sector's gain of 5.67% and the S&P 500's gain of 3.92%.Market participants will be closely following the financial results of Cadence Design Systems in its upcoming release. The company's earnings per share (EPS) are projected to be $1.57, reflecting a 22.66% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $1.26 billion, indicating a 18.8% upward movement from the same quarter last year. For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.77 per share and a revenue of $5.2 billion, representing changes of +13.4% and +11.99%, respectively, from the prior year. Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cadence Design Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability. Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. As of now, Cadence Design Systems holds a Zacks Rank of #3 (Hold). With respect to valuation, Cadence Design Systems is currently being traded at a Forward P/E ratio of 43.35. This valuation marks a premium compared to its industry average Forward P/E of 25.34. We can also see that CDNS currently has a PEG ratio of 3.22. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Computer - Software was holding an average PEG ratio of 2.43 at yesterday's closing price. The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 27, positioning it in the top 11% 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. To follow CDNS in the coming trading sessions, be sure to utilize Zacks.com. Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks