Zacks Equity Research
3 min read
Cadence Design Systems (CDNS) closed the most recent trading day at $311.03, moving +1.33% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 1.2%. At the same time, the Dow added 1.79%, and the tech-heavy Nasdaq gained 1.52%.
The stock of maker of hardware and software products for validating chip designs has risen by 6.81% in the past month, lagging the Computer and Technology sector’s gain of 8.24% and overreaching the S&P 500’s gain of 5.15%.
The investment community will be closely monitoring the performance of Cadence Design Systems in its forthcoming earnings report. The company is scheduled to release its earnings on April 27, 2026. It is anticipated that the company will report an EPS of $1.91, marking a 21.66% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.44 billion, showing a 16.04% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates project earnings of $8.12 per share and a revenue of $5.99 billion, demonstrating changes of +13.73% and +13%, respectively, from the preceding year.
It’s also important for investors to be aware of any recent modifications to analyst estimates for Cadence Design Systems. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, 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 remained steady. Cadence Design Systems is holding a Zacks Rank of #3 (Hold) right now.
With respect to valuation, Cadence Design Systems is currently being traded at a Forward P/E ratio of 37.82. This represents a premium compared to its industry average Forward P/E of 16.24.
It’s also important to note that CDNS currently trades at a PEG ratio of 2.95. 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 industry currently had an average PEG ratio of 1.53 as of yesterday’s close.
