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If You Invested $1000 in Synopsys a Decade Ago, This is How Much It'd Be Worth Now
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Synopsys (SNPS - Free Report) ten years ago? It may not have been easy to hold on to SNPS for all that time, but if you did, how much would your investment be worth today?
Synopsys' Business In-Depth
With that in mind, let's take a look at Synopsys' main business drivers.
Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries. The company offers a full suite of products used in the logic synthesis and functional verification phases of chip design, including a broad array of reusable design building blocks. It also sells physical synthesis and physical design products as well as physical verification products.
The company’s products are used to design a chip, from concept to the point of delivery to the manufacturer for fabrication. Synopsis provides software and hardware, which are used to develop electronic systems that incorporate chips. Additionally, the company provides Intellectual Property (IP) used in semiconductor design and manufacturing to simplify the design process and accelerate time-to-market for its customers.
Synopsis reports revenues in three segments, namely Time-Based Products, Upfront Products and Maintenance and Service.
Time-Based Products (59% of fiscal 2022 revenues): Segment revenues are recognized as Technology Subscription License (TSL) revenues. Under this segment, the company recognizes revenues from fees over the period of the license or as and when the installments are paid by the customer, whichever is later.
Upfront Products (24%): These revenues are recognized as Term License revenues. Under this segment, the company recognizes revenues from term licenses in full after the completion of the shipment of the software, wherein at least 75% of the license fee is paid within a year of shipment, after fulfilling all other revenue recognition criteria.
Maintenance and Service (17%): Under this segment revenues come from maintenance fees that are generated over the maintenance period; along with revenues generated from professional service and training fees.
The company conducts its business across four geographic regions namely: North America (47% of fiscal 2022 revenues), China (16%), Europe (10%), Korea (10%) and others (17%).
Synopsys’ competitors include EDA vendors like Cadence Design Systems Inc. and Mentor Graphics Corporation.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Synopsys a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2013 would be worth $14,288.90, or a 1,328.89% gain, as of November 13, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 149.36% and gold's return of 44.44% over the same time frame.
Looking ahead, analysts are expecting more upside for SNPS.
Synopsys is benefiting from strong design wins due to a robust product portfolio. Growth in the hybrid working trend is driving demand for bandwidth. Strong traction for Synopsys’ Fusion Compiler product boosted the top line. The growing demand for advanced technology, design, IP and security solutions is also creating solid prospects. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new compute and machine learning architectures. Our estimates suggest that Synopsys’ revenues will grow at a CAGR of 12% through the 2023-2025 period. However, tightening the corporate budget amid ongoing macroeconomic challenges and unfavorable currency exchange rates might hurt its near-term growth prospects. Geopolitical challenges and restrictions over trade with Huawei are other woes.
Shares have gained 5.95% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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If You Invested $1000 in Synopsys a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Synopsys (SNPS - Free Report) ten years ago? It may not have been easy to hold on to SNPS for all that time, but if you did, how much would your investment be worth today?
Synopsys' Business In-Depth
With that in mind, let's take a look at Synopsys' main business drivers.
Synopsys is a vendor of electronic design automation (EDA) software to the semiconductor and electronics industries. The company offers a full suite of products used in the logic synthesis and functional verification phases of chip design, including a broad array of reusable design building blocks. It also sells physical synthesis and physical design products as well as physical verification products.
The company’s products are used to design a chip, from concept to the point of delivery to the manufacturer for fabrication. Synopsis provides software and hardware, which are used to develop electronic systems that incorporate chips. Additionally, the company provides Intellectual Property (IP) used in semiconductor design and manufacturing to simplify the design process and accelerate time-to-market for its customers.
Synopsis reports revenues in three segments, namely Time-Based Products, Upfront Products and Maintenance and Service.
Time-Based Products (59% of fiscal 2022 revenues): Segment revenues are recognized as Technology Subscription License (TSL) revenues. Under this segment, the company recognizes revenues from fees over the period of the license or as and when the installments are paid by the customer, whichever is later.
Upfront Products (24%): These revenues are recognized as Term License revenues. Under this segment, the company recognizes revenues from term licenses in full after the completion of the shipment of the software, wherein at least 75% of the license fee is paid within a year of shipment, after fulfilling all other revenue recognition criteria.
Maintenance and Service (17%): Under this segment revenues come from maintenance fees that are generated over the maintenance period; along with revenues generated from professional service and training fees.
The company conducts its business across four geographic regions namely: North America (47% of fiscal 2022 revenues), China (16%), Europe (10%), Korea (10%) and others (17%).
Synopsys’ competitors include EDA vendors like Cadence Design Systems Inc. and Mentor Graphics Corporation.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Synopsys a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2013 would be worth $14,288.90, or a 1,328.89% gain, as of November 13, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 149.36% and gold's return of 44.44% over the same time frame.
Looking ahead, analysts are expecting more upside for SNPS.
Synopsys is benefiting from strong design wins due to a robust product portfolio. Growth in the hybrid working trend is driving demand for bandwidth. Strong traction for Synopsys’ Fusion Compiler product boosted the top line. The growing demand for advanced technology, design, IP and security solutions is also creating solid prospects. The rising impact of artificial intelligence, 5G, the Internet of Things and big data is driving investments in new compute and machine learning architectures. Our estimates suggest that Synopsys’ revenues will grow at a CAGR of 12% through the 2023-2025 period. However, tightening the corporate budget amid ongoing macroeconomic challenges and unfavorable currency exchange rates might hurt its near-term growth prospects. Geopolitical challenges and restrictions over trade with Huawei are other woes.
Shares have gained 5.95% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.