Cadence Design Systems (CDNS) ended the recent trading session at $260.56, demonstrating a +0.42% swing from the preceding day's closing price. The stock lagged the S&P 500's daily gain of 0.79%. At the same time, the Dow added 0.78%, and the tech-heavy Nasdaq gained 0.64%.

Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had gained 4.87% over the past month. This has outpaced the Computer and Technology sector's loss of 4.81% and the S&P 500's loss of 3.56% in that time.

The investment community will be paying close attention to the earnings performance of Cadence Design Systems in its upcoming release. The company is slated to reveal its earnings on April 28, 2025. The company is expected to report EPS of $1.49, up 27.35% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.24 billion, up 22.76% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $6.71 per share and revenue of $5.19 billion, which would represent changes of +12.4% and +11.82%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates 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 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.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. Cadence Design Systems is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Cadence Design Systems is currently trading at a Forward P/E ratio of 38.69. This signifies a premium in comparison to the average Forward P/E of 24.06 for its industry.

It is also worth noting that CDNS currently has a PEG ratio of 2.76. 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 average PEG ratio for the Computer - Software industry stood at 2.09 at the close of the market yesterday.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 81, this industry ranks in the top 33% of all industries, numbering over 250.

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

This article originally published on Zacks Investment Research (zacks.com).

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