The most recent trading session ended with Cadence Design Systems (CDNS) standing at $241.29, reflecting a -0.19% shift from the previouse trading day's closing. The stock outperformed the S&P 500, which registered a daily loss of 1.22%. At the same time, the Dow lost 1.55%, and the tech-heavy Nasdaq lost 0.35%.

Prior to today's trading, shares of the maker of hardware and software products for validating chip designs had lost 18.96% over the past month. This has lagged the Computer and Technology sector's loss of 6.4% and the S&P 500's loss of 2.31% in that time.

Investors will be eagerly watching for the performance of Cadence Design Systems in its upcoming earnings disclosure. The company is expected to report EPS of $1.50, up 28.21% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $1.24 billion, reflecting a 22.39% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $6.72 per share and a revenue of $5.19 billion, demonstrating changes of +12.56% and +11.74%, respectively, from the preceding year.

It is also important to note the recent changes to analyst estimates for Cadence Design Systems. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.53% lower. Cadence Design Systems currently has a Zacks Rank of #3 (Hold).

From a valuation perspective, Cadence Design Systems is currently exchanging hands at a Forward P/E ratio of 35.97. This valuation marks a premium compared to its industry's average Forward P/E of 26.94.

One should further note that CDNS currently holds a PEG ratio of 2.57. 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 2.1 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 147, this industry ranks in the bottom 42% of all industries, numbering over 250.

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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Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report

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

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