In the latest trading session, Synopsys (SNPS - Free Report) closed at $149.93, marking a +0.99% move from the previous day. This move outpaced the S&P 500's daily gain of 0.7%. Meanwhile, the Dow gained 0.29%, and the Nasdaq, a tech-heavy index, added 1.04%.
Heading into today, shares of the maker of software used to test and develop chips had gained 9.26% over the past month, outpacing the Computer and Technology sector's gain of 7.4% and the S&P 500's gain of 4.38% in that time.
Wall Street will be looking for positivity from SNPS as it approaches its next earnings report date. The company is expected to report EPS of $0.92, down 14.81% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $822.30 million, up 0.23% from the year-ago period.
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.
Any recent changes to analyst estimates for SNPS should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. SNPS currently has a Zacks Rank of #1 (Strong Buy).
In terms of valuation, SNPS is currently trading at a Forward P/E ratio of 28.43. Its industry sports an average Forward P/E of 32.93, so we one might conclude that SNPS is trading at a discount comparatively.
Also, we should mention that SNPS has a PEG ratio of 2.23. 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. SNPS's industry had an average PEG ratio of 2.21 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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.
You can find more information on all of these metrics, and much more, on Zacks.com.