Synopsys (SNPS) closed at $449.58 in the latest trading session, marking a +1.91% move from the prior day. The stock’s performance was ahead of the S&P 500’s daily gain of 1.2%. Elsewhere, the Dow saw an upswing of 1.79%, while the tech-heavy Nasdaq appreciated by 1.52%.
Heading into today, shares of the maker of software used to test and develop chips had gained 3.01% over the past month, lagging the Computer and Technology sector’s gain of 8.24% and the S&P 500’s gain of 5.15%.
The upcoming earnings release of Synopsys will be of great interest to investors. On that day, Synopsys is projected to report earnings of $3.17 per share, which would represent a year-over-year decline of 13.62%. Meanwhile, our latest consensus estimate is calling for revenue of $2.25 billion, up 40.29% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.43 per share and revenue of $9.62 billion. These totals would mark changes of +11.77% and +36.43%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Synopsys. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 has shifted 0.28% downward. Synopsys is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note Synopsys’s current valuation metrics, including its Forward P/E ratio of 30.57. This indicates a premium in contrast to its industry’s Forward P/E of 16.24.
It is also worth noting that SNPS currently has a PEG ratio of 2.57. 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. As the market closed yesterday, the Computer – Software industry was having an average PEG ratio of 1.53.
The Computer – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 59, positioning it in the top 25% of all 250+ industries.
