Synopsys, Inc.

(NASDAQ Global Select)
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Synopsys (SNPS) Registers a Bigger Fall Than the Market: Important Facts to Note

AI-generated analysis

πŸ“‰ Synopsys stock closed at $501.52, down 1.67%, with underperformance relative to broader market declines compared to the S&P 500 and Nasdaq.

πŸ”„ Over the past month, shares gained 15.61%, outperforming the S&P 500's 7.72% gain but lagging slightly behind the sector average of 15.86%.

πŸ“… The company is set to report earnings on May 27, 2026, with analysts expecting a significant 40.29% revenue increase to $2.25 billion for the quarter.

πŸ’Έ Quarterly earnings are forecast at $3.17 per share, representing a notable 13.62% decline from the same period last year.

πŸ“ˆ Full-year fiscal year predictions show revenue of $9.62 billion and EPS of $14.48, indicating projected growth of 36.43% and 12.16% respectively.

πŸ“‰ Zacks Consensus Estimates have remained unchanged over the last 30 days, reflecting stable but cautious analyst outlooks.

βš–οΈ Valuation metrics show Synopsys trading at a Forward P/E ratio of 35.22, which is more than double its industry average of 15.73.

πŸ“Š The stock's PEG ratio stands at 2.97, significantly higher than the Computer - Software industry average of 1.52.

πŸ† Synopsys currently holds a Zacks Rank of #3 (Hold), suggesting neutral sentiment from professional analysts based on recent performance.

🏭 The industry operates within the bottom 28% of all industries based on Zacks Industry Rank, potentially impacting overall market positioning.

Bullish Signals
  • Synopsys shares appreciated by 15.61% over the past month, outperforming the S&P 500's gain of 7.72%, demonstrating resilience despite broader market declines.
  • Analysts predict a significant revenue escalation of 40.29% to $2.25 billion for the upcoming quarter, signaling strong top-line growth prospects.
  • Zacks Consensus Estimates project full-year earnings and revenue growth of +12.16% and +36.43%, respectively, indicating sustained profitability expansion.
  • Synopsys is a leading provider of software used to test and develop chips, positioning it well for continued demand in the semiconductor industry.
Risk Factors
  • Synopsys stock experienced a -1.67% decline, underperforming the S&P 500's gain of 7.72% over the past month and lagging behind the Computer and Technology sector's gain of 15.86%.
  • Analysts predict a significant 13.62% decline in quarterly earnings per share (EPS) compared to the equivalent quarter last year, with projected EPS of $3.17.
  • The company carries a Forward P/E ratio of 35.22, which represents a substantial premium compared to its industry average Forward P/E of 15.73.
  • Synopsys has a PEG ratio of 2.97, significantly higher than the Computer - Software industry average PEG ratio of 1.52, indicating expensive valuation relative to growth.
  • The Computer - Software industry holds a Zacks Industry Rank of 178, placing it in the bottom 28% of all 250+ industries evaluated by Zacks Investment Research.
  • Synopsys currently holds a Zacks Rank of #3 (Hold), suggesting analysts do not see strong buy or sell momentum at this time.
Full Analysis
Synopsys, Inc. (SNPS) concluded recent trading at $501.52, reflecting a decline of 1.67% from the previous session's close. While the broader market also experienced losses with the S&P 500 down 1.24%, Nasdaq falling 1.54%, and the Dow dropping 1.07%, Synopsys underperformed its specific peer group slightly, having appreciated only 15.61% over the past month compared to the Computer and Technology sector's gain of 15.86%. However, the stock still significantly outperformed the S&P 500's monthly gain of 7.72%. The article notes that analysts and investors are focused on the upcoming earnings disclosure scheduled for May 27, 2026, with consensus estimates predicting an EPS of $3.17, which represents a projected decline of 13.62% year-over-year. In contrast, revenue is expected to reach $2.25 billion, marking a significant 40.29% escalation compared to the equivalent quarter last year. Looking at full fiscal year projections, Zacks Consensus Estimates predict Synopsys earnings of $14.48 per share and revenue of $9.62 billion, representing year-over-year increases of +12.16% and +36.43%, respectively. Valuation metrics show the company trading at a Forward P/E ratio of 35.22, which is considered a premium compared to its industry average of 15.73. The stock's PEG ratio is currently valued at 2.97, whereas the Computer - Software industry average stands at 1.52. Despite these metrics, Synopsys holds a Zacks Rank of #3 (Hold), as the consensus EPS estimate has remained unchanged over the last 30 days. The Computer - Software industry itself ranks in the bottom 28% of all rated industries based on the Zacks Industry Rank system. The report concludes by encouraging investors to utilize these metrics and specific industry rank data from Zacks.com to inform trading decisions.