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Cadence Design Systems (CDNS) is a Top-Ranked Growth Stock: Should You Buy?

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why This 1 Growth Stock Should Be On Your Watchlist

For growth investors, a company's financial strength, overall health, and future outlook take precedence, so they'll want to zero in on the Growth Style Score. This Score examines things like projected and historical earnings, sales, and cash flow to find stocks that will generate sustainable growth over time.

Cadence Design Systems (CDNS)

Based in San Jose, CA, Cadence Design Systems Inc. (CDNS) offers products and tools that help customers to design electronic products. Through System Design Enablement (SDE) strategy the company offers software, hardware, services and reusable IC design blocks (IPs) to electronic systems and semiconductor customers.

CDNS boasts a Growth Style Score of A and VGM Score of B, and holds a Zacks Rank #3 (Hold) rating. Its bottom-line is projected to rise 28.3% year-over-year for 2022, while Wall Street anticipates its top line to improve by 18.6%.

Six analysts revised their earnings estimate higher in the last 60 days for fiscal 2022, while the Zacks Consensus Estimate has increased $0.10 to $4.22 per share. CDNS also boasts an average earnings surprise of 10.4%.

Looking at cash flow, Cadence Design Systems is expected to report cash flow growth of 21.5% this year; CDNS has generated cash flow growth of 22.6% over the past three to five years.

With solid fundamentals, a good Zacks Rank, and top-tier Growth and VGM Style Scores, CDNS should be on investors' short lists.

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