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Synopsys (SNPS) Advances While Market Declines: Some Information for Investors

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The most recent trading session ended with Synopsys (SNPS - Free Report) standing at $522.88, reflecting a +0.78% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.08% loss on the day. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.22%.

Shares of the maker of software used to test and develop chips witnessed a gain of 5.95% over the previous month, beating the performance of the Computer and Technology sector with its gain of 2.9% and the S&P 500's gain of 1.42%.

Market participants will be closely following the financial results of Synopsys in its upcoming release. The company plans to announce its earnings on November 29, 2023. The company is expected to report EPS of $3.04, up 59.16% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.58 billion, up 23.3% from the year-ago period.

Investors should also pay attention to any latest changes in analyst estimates for Synopsys. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.55% higher within the past month. Synopsys presently features a Zacks Rank of #2 (Buy).

In terms of valuation, Synopsys is currently trading at a Forward P/E ratio of 41.43. For comparison, its industry has an average Forward P/E of 27.11, which means Synopsys is trading at a premium to the group.

Investors should also note that SNPS has a PEG ratio of 2.48 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Computer - Software industry stood at 2.4 at the close of the market yesterday.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 78, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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