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Synopsys (SNPS) Laps the Stock Market: Here's Why

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The most recent trading session ended with Synopsys (SNPS - Free Report) standing at $541.52, reflecting a +1.26% shift from the previouse trading day's closing. The stock's performance was ahead of the S&P 500's daily gain of 0.74%. On the other hand, the Dow registered a gain of 0.58%, and the technology-centric Nasdaq increased by 1.13%.

The investment community will be paying close attention to the earnings performance of Synopsys in its upcoming release. The company is slated to reveal its earnings on November 29, 2023. The company's upcoming EPS is projected at $3.04, signifying a 59.16% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $1.58 billion, indicating a 23.3% upward movement from the same quarter last year.

Any recent changes to analyst estimates for Synopsys should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, Synopsys possesses a Zacks Rank of #2 (Buy).

Investors should also note Synopsys's current valuation metrics, including its Forward P/E ratio of 42.7. This expresses a premium compared to the average Forward P/E of 29.05 of its industry.

We can additionally observe that SNPS currently boasts a PEG ratio of 2.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Computer - Software industry stood at 2.42 at the close of the market yesterday.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 61, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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