Cadence Design Systems (CDNS) closed the latest trading day at $302.91, indicating a +0.09% change from the previous session's end. The stock fell short of the S&P 500, which registered a gain of 0.36% for the day. Meanwhile, the Dow lost 0.28%, and the Nasdaq, a tech-heavy index, added 0.51%.

Coming into today, shares of the maker of hardware and software products for validating chip designs had lost 0.03% in the past month. In that same time, the Computer and Technology sector 0%, while the S&P 500 gained 2.11%.

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 February 18, 2025. In that report, analysts expect Cadence Design Systems to post earnings of $1.82 per share. This would mark year-over-year growth of 31.88%. Our most recent consensus estimate is calling for quarterly revenue of $1.35 billion, up 26.13% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Cadence Design Systems. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.58% lower. Cadence Design Systems is currently sporting a Zacks Rank of #4 (Sell).

Digging into valuation, Cadence Design Systems currently has a Forward P/E ratio of 44.49. This denotes a premium relative to the industry's average Forward P/E of 31.19.

Meanwhile, CDNS's PEG ratio is currently 2.87. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.28.

The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 135, finds itself in the bottom 47% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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