Synopsys (SNPS - Free Report) closed the most recent trading day at $152.17, moving +1.19% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.01%. At the same time, the Dow added 0.66%, and the tech-heavy Nasdaq gained 1.43%.
Prior to today's trading, shares of the maker of software used to test and develop chips had gained 8.11% over the past month. This has outpaced the Computer and Technology sector's gain of 2.89% and the S&P 500's gain of 0.19% in that time.
Wall Street will be looking for positivity from SNPS as it approaches its next earnings report date. In that report, analysts expect SNPS to post earnings of $0.92 per share. This would mark a year-over-year decline of 14.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $822.30 million, up 0.23% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.22 per share and revenue of $3.62 billion. These totals would mark changes of +14.47% and +7.85%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for SNPS. Recent revisions tend to reflect the latest 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. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SNPS is currently sporting a Zacks Rank of #1 (Strong Buy).
Digging into valuation, SNPS currently has a Forward P/E ratio of 28.8. This valuation marks a discount compared to its industry's average Forward P/E of 32.89.
We can also see that SNPS currently has a PEG ratio of 2.26. 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. The Computer - Software was holding an average PEG ratio of 2.24 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 49, putting it in the top 20% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.