In recent trading, shares of Cadence Design Systems Inc (Symbol: CDNS ) crossed over the average analyst 12-month target price of $283.40, changing hands for $292.14/share. When a stock reaches the target set by an analyst, the analyst logically has two ways to react: lower the valuation, or, readjust his target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the share price higher – if things are looking up for the company, it may be time for that target price to be raised.
There are 10 different analyst targets within the Zacks coverage universe contributing to that average for Cadence Design Systems Inc, but the average is just that – a mathematical average. There are analysts with lower targets than the average, including one looking for a price of $250.00. And then on the other side of the spectrum one analyst has a target as high as $315.00. The standard deviation is $23.571.
But the whole reason to look at the average CDNS price goal in the first place is to tap into a “wisdom of crowds” effort, bringing together the contributions of all the individual minds that have contributed to the ultimate number, as opposed to what only one particular expert believes. And so with CDNS crossing above that average target price of $283.40/share, investors in CDNS got a good signal to spend fresh time evaluating the company and deciding for themselves: $283.40 is just one stop on the way to even. higher goal, or has the evaluation stretched to the point where it’s time to think about taking some chips off the table? Below is a table showing the current thinking of the analysts who cover Cadence Design Systems Inc:
Recent analysis of CDNS Ratings | ||||
---|---|---|---|---|
» | current | 1 Month ago | 2 Month ago | 3 Month ago |
Strong buy ratings: | 9 | 9 | 10 | 10 |
Buy ratings: | 1 | 1 | 1 | 1 |
Hold ratings: | 1 | 1 | 1 | 1 |
Sell ratings: | 0 | 0 | 0 | 0 |
Strong sales estimates: | 0 | 0 | 0 | 0 |
Average rating: | 1.27 | 1.27 | 1.25 | 1.25 |
The average rating presented in the last row of the table above is from 1 to 5 where 1 is a Strong Buy and 5 is a Strong Sell. This article used data provided by Zacks Investment Research via Quandl.com. Get the latest Zacks research report on CDNS — FREE.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.