Synopsys (SNPS - Free Report) closed the most recent trading day at $142.96, moving +0.69% from the previous trading session. This change outpaced the S&P 500's 0.28% loss on the day. Meanwhile, the Dow lost 0.42%, and the Nasdaq, a tech-heavy index, lost 0.03%.
Prior to today's trading, shares of the maker of software used to test and develop chips had gained 7.37% over the past month. This has outpaced the Computer and Technology sector's gain of 5.05% and the S&P 500's gain of 3.31% in that time.
Wall Street will be looking for positivity from SNPS as it approaches its next earnings report date. On that day, SNPS is projected to report earnings of $0.92 per share, which would represent a year-over-year decline of 14.81%. Meanwhile, our latest consensus estimate is calling for revenue of $822.30 million, up 0.23% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.22 per share and revenue of $3.62 billion, which would represent changes of +14.47% and +7.85%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for SNPS. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 past month, the Zacks Consensus EPS estimate remained stagnant. SNPS currently has a Zacks Rank of #1 (Strong Buy).
Digging into valuation, SNPS currently has a Forward P/E ratio of 27.19. This valuation marks a discount compared to its industry's average Forward P/E of 33.37.
Investors should also note that SNPS has a PEG ratio of 2.13 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SNPS's industry had an average PEG ratio of 2.17 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.