June 4, 2023


Digitally first class

Is Cadence Design Systems (CDNS) Stock Outpacing Its Computer and Technology Peers This Year? – November 29, 2021

For those looking to find strong Computer and Technology stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Cadence Design Systems (CDNS Free Report) one of those stocks right now? A quick glance at the company’s year-to-date performance in comparison to the rest of the Computer and Technology sector should help us answer this question.

Cadence Design Systems is a member of our Computer and Technology group, which includes 647 different companies and currently sits at #8 in the Zacks Sector Rank. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Cadence Design Systems is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for CDNS’ full-year earnings has moved 3.4% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the most recent data, CDNS has returned 30.7% so far this year. Meanwhile, stocks in the Computer and Technology group have gained about 24.4% on average. This means that Cadence Design Systems is performing better than its sector in terms of year-to-date returns.

One other Computer and Technology stock that has outperformed the sector so far this year is Diodes (DIOD Free Report) . The stock is up 47.4% year-to-date.

In Diodes’ case, the consensus EPS estimate for the current year increased 6.4% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, Cadence Design Systems belongs to the Computer – Software industry, a group that includes 38 individual stocks and currently sits at #167 in the Zacks Industry Rank. On average, stocks in this group have gained 40% this year, meaning that CDNS is slightly underperforming its industry in terms of year-to-date returns.

Diodes, however, belongs to the Electronics – Semiconductors industry. Currently, this 40-stock industry is ranked #47. The industry has moved +35.5% so far this year.

Cadence Design Systems and Diodes could continue their solid performance, so investors interested in Computer and Technology stocks should continue to pay close attention to these stocks.