Back to top

Image: Bigstock

Synopsys (SNPS) Exceeds Market Returns: Some Facts to Consider

Read MoreHide Full Article

In the latest trading session, Synopsys (SNPS - Free Report) closed at $409.68, marking a +2.01% move from the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.69%. Meanwhile, the Dow experienced a rise of 0.67%, and the technology-dominated Nasdaq saw an increase of 0.82%.

The stock of maker of software used to test and develop chips has fallen by 12.09% in the past month, lagging the Computer and Technology sector's gain of 0.07% and the S&P 500's loss of 0.31%.

Market participants will be closely following the financial results of Synopsys in its upcoming release. The company plans to announce its earnings on December 10, 2025. The company's earnings per share (EPS) are projected to be $2.79, reflecting a 17.94% decrease from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $2.25 billion, showing a 37.59% escalation compared to the year-ago quarter.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.83 per share and a revenue of $7.05 billion, signifying shifts of -2.8% and 0%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Synopsys. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.67% lower. Synopsys is currently a Zacks Rank #3 (Hold).

With respect to valuation, Synopsys is currently being traded at a Forward P/E ratio of 28.66. For comparison, its industry has an average Forward P/E of 22.24, which means Synopsys is trading at a premium to the group.

We can additionally observe that SNPS currently boasts a PEG ratio of 3.01. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computer - Software industry had an average PEG ratio of 1.76 as trading concluded yesterday.

The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 75, placing it within the top 31% of over 250 industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Synopsys, Inc. (SNPS) - free report >>

Published in