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Synopsys (SNPS) Rises Yet Lags Behind Market: Some Facts Worth Knowing

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The most recent trading session ended with Synopsys (SNPS - Free Report) standing at $528.64, reflecting a +1.5% shift from the previouse trading day's closing. The stock lagged the S&P 500's daily gain of 1.69%. At the same time, the Dow added 1.04%, and the tech-heavy Nasdaq gained 2.43%.

The maker of software used to test and develop chips's stock has dropped by 15.45% in the past month, falling short of the Computer and Technology sector's loss of 9.75% and the S&P 500's loss of 4.78%.

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 August 21, 2024. The company's upcoming EPS is projected at $3.26, signifying a 13.19% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $1.53 billion, reflecting a 2.55% rise from the equivalent quarter last year.

SNPS's full-year Zacks Consensus Estimates are calling for earnings of $13.03 per share and revenue of $6.19 billion. These results would represent year-over-year changes of +16.44% and +5.91%, respectively.

Investors should also note any recent changes to analyst estimates for Synopsys. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent 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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Right now, Synopsys possesses a Zacks Rank of #3 (Hold).

Looking at valuation, Synopsys is presently trading at a Forward P/E ratio of 39.97. This expresses a premium compared to the average Forward P/E of 29.54 of its industry.

One should further note that SNPS currently holds a PEG ratio of 2.49. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.25.

The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 141, finds itself in the bottom 45% echelons 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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