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Synopsys (SNPS) Falls More Steeply Than Broader Market: What Investors Need to Know

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Synopsys (SNPS - Free Report) closed the most recent trading day at $633.47, moving -1.84% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 0.37% for the day. At the same time, the Dow lost 0.74%, and the tech-heavy Nasdaq lost 0.03%.

The maker of software used to test and develop chips's shares have seen an increase of 23.37% over the last month, surpassing the Computer and Technology sector's gain of 4.58% and the S&P 500's gain of 2.68%.

Analysts and investors alike will be keeping a close eye on the performance of Synopsys in its upcoming earnings disclosure. The company's earnings report is set to go public on September 9, 2025. It is anticipated that the company will report an EPS of $3.84, marking a 11.95% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.77 billion, showing a 15.9% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.09 per share and revenue of $6.77 billion. These totals would mark changes of +14.32% and +8.03%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Synopsys. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending 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 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 last 30 days, the Zacks Consensus EPS estimate has moved 0.03% lower. Synopsys is currently sporting a Zacks Rank of #3 (Hold).

With respect to valuation, Synopsys is currently being traded at a Forward P/E ratio of 42.77. This valuation marks a premium compared to its industry average Forward P/E of 25.14.

It is also worth noting that SNPS currently has a PEG ratio of 3.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.33.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 46, this industry ranks in the top 19% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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