SNPS Synopsys, Inc. - Fundamental Analysis
NEUTRAL
SNPS Stock | Fundamental Analysis & Investment Insights
NASDAQ
•
Technology
•
Software - Infrastructure
Current Price
$389.83
Analyst Target
$556.4
+42.7% Upside
52W High
$651.73
52W Low
$365.74
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
65%
Analysis Accuracy
Synopsys (SNPS) trades at a premium valuation with strong gross margins and solid long-term revenue growth, but faces significant near-term headwinds reflected in sharply declining earnings and negative price momentum. Despite a bullish analyst target price of $556.40 implying 43% upside, recent quarters have shown deteriorating profitability, with YoY EPS down 56.3% and a -44.3% earnings surprise in Q3 2025. The company maintains a healthy balance sheet with a Debt/Equity of 0.55 and strong liquidity, yet insider selling worth $29.76M over the past six months raises caution. Relative to peers like SNOW and ADI, SNPS exhibits better margins and cash flow discipline but lags in earnings growth and market sentiment, trading 40% below its 52-week high amid broader semiconductor cyclicality concerns.
Key Strengths
Exceptional gross margin of 81.13%, reflecting pricing power and low variable costs in software licensing model
Revenue growth of 14.00% YoY outpaces sector average of 19.46% but remains resilient in a high-margin business
Strong liquidity profile with Current Ratio of 1.62 and Quick Ratio of 1.40, indicating robust short-term financial health
Profit margin of 31.04% significantly exceeds sector average of 16.54%, highlighting operational efficiency
Analyst target price of $556.40 suggests 43% upside, reflecting confidence in recovery and AI-driven design demand
Key Risks
Earnings growth collapsing: YoY EPS down 56.3% and Q/Q EPS down 59.1%, signaling severe profitability compression
High valuation despite earnings decline: Forward P/E of 26.22 appears stretched given negative earnings momentum
Recent insider selling by CFO and CEO totaling $29.76M over 6 months signals leadership's lack of near-term confidence
Operating margin at 9.50% is weak relative to gross margin, suggesting rising SG&A or R&D pressure
Price down 28.9% over the past year and 10.6% in the last month, indicating sustained negative momentum and sentiment erosion
AI Fair Value Estimate
Based on comprehensive analysis
$556.4
+42.7% above current price
Performance Snowflake
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Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
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Insider Trading & Analyst Ratings
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