The latest trading session saw Cadence Design Systems (CDNS) ending at $302.73, denoting a +0.35% adjustment from its last day's close. The stock outpaced the S&P 500's daily gain of 0.16%. Elsewhere, the Dow saw an upswing of 0.25%, while the tech-heavy Nasdaq depreciated by 0.06%.

Heading into today, shares of the maker of hardware and software products for validating chip designs had lost 1.96% over the past month, lagging the Computer and Technology sector's loss of 0.39% and outpacing the S&P 500's loss of 2.7% in that time.

Investors will be eagerly watching for the performance of Cadence Design Systems in its upcoming earnings disclosure. The company's earnings report is set to be unveiled 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%. In the meantime, our current consensus estimate forecasts the revenue to be $1.35 billion, indicating a 26.13% growth compared to the corresponding quarter of the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Cadence Design Systems boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Cadence Design Systems is currently trading at a Forward P/E ratio of 44.29. For comparison, its industry has an average Forward P/E of 30.41, which means Cadence Design Systems is trading at a premium to the group.

Also, we should mention that CDNS has a PEG ratio of 2.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.34 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 142, putting it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report

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