Synopsys (SNPS) AI Stock Analysis

• Market Cap: $117.22B
• Dividend Yield: N/A
• Average Volume (3M): 2.07M
• Price to Earnings (P/E): 45.6
• Beta (1Y): 1.58
• Revenue Growth: 0.30%
• EPS Growth: 50.17%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 98
• Industry: Software - Infrastructure
• EPS (TTM): 3.67
• Shares Outstanding: 185,043,640
• 10 Day Avg. Volume: 2,486,013
• 30 Day Avg. Volume: 2,065,001
• PEG Ratio: 10.50
• Price to Book (P/B): 8.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 81.08
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 3.43
• Enterprise Value/Gross Profit: 17.10
• Enterprise Value/Ebitda: 13.26
• 1Y Price Target: $621.07
• Price Target Upside: -1.96% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 77 Outperform
• Price Target: $732.00 ▲(15.55%Upside)

Synopsys demonstrates strong financial and operational performance, with robust revenue growth and profitability. The stock's technical indicators show strong momentum, but it may be overvalued based on its P/E ratio. Despite the earnings call highlighting potential challenges in China, the company's confidence and strategic moves, such as the ANSYS acquisition, bolster its long-term position.

Positive Factors

Market Opportunities

The inclusion of Ansys allows Synopsys to address a wider array of new physical challenges, unlocking new customers and opportunities in markets like datacenters, electric vehicles, and industrial automation.

Strategic Acquisition

The acquisition of Ansys is seen as a strong strategic positive for Synopsys, enabling product synergies in advanced semiconductor design.

Negative Factors

Earnings Impact

The acquisition is modeled as dilutive to EPS through FY26.

Export Restrictions

Concerns loom around whether BIS could ban any shipments to China, potentially putting 8-10% of SNPS FY25 sales at risk.

Regulatory Uncertainty

Synopsys has not provided an updated timeline for the closure of the Ansys acquisition, which might cause uncertainty among investors.

Synopsys Business Overview & Revenue Model

Company Description

Synopsys, Inc. is a leading provider of electronic design automation (EDA) software and services, primarily serving the semiconductor and electronics industries. The company offers tools that assist engineers in designing and testing integrated circuits and electronic systems. Synopsys' core products include software for designing, simulating, and verifying the performance of chips and systems, as well as addressing security and quality issues in software development. Established in 1986 and headquartered in Mountain View, California, Synopsys also provides intellectual property (IP) products, which include pre-designed and pre-verified components that can be integrated into larger designs.

How the Company Makes Money

Synopsys generates revenue through the sale of software licenses, maintenance and service agreements, and consulting services. The company's primary revenue stream comes from licensing its EDA software tools to semiconductor companies and electronics manufacturers. These licenses are typically subscription-based, providing a recurring revenue model. Additionally, Synopsys offers IP products that are licensed to customers for incorporation into their own chip designs. The company also earns money by providing professional services, which include training and consulting to help clients optimize their use of Synopsys' tools and technologies. Partnerships with leading semiconductor manufacturers and technology companies further bolster its revenue, as these collaborations often lead to joint development and innovation initiatives.

Synopsys Financial Statement Overview

Summary

Synopsys demonstrates strong financial health with consistent revenue growth and robust profitability. The balance sheet is solid with manageable debt levels and impressive return on equity, though minor fluctuations in operational margins suggest potential efficiency pressures.

Income Statement

Synopsys demonstrates a strong financial performance with robust gross and net profit margins, indicating efficient cost management and profitability. The company has shown consistent revenue growth, with a notable increase in net income over the years. However, there is a slight decrease in EBIT and EBITDA margins in the TTM, suggesting potential pressures on operating efficiency.

Balance Sheet

The balance sheet of Synopsys reflects a strong equity position with a favorable equity ratio. The debt-to-equity ratio remains manageable, indicating prudent leverage levels. Return on equity is impressive, showcasing the company's ability to generate returns for shareholders. The substantial increase in total assets and equity suggests robust financial growth.

Cash Flow

The company's cash flow statement highlights a healthy free cash flow generation, supporting operational and strategic initiatives. Although there is a decrease in operating cash flow in the TTM, the company maintains a strong free cash flow to net income ratio, indicating efficient cash conversion. The significant increase in financing cash flow in the TTM could suggest increased financial activities or investments.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.13B	5.84B	5.08B	4.20B	3.69B
Gross Profit	4.88B	4.62B	4.02B	3.34B	2.89B
EBITDA	1.65B	1.65B	1.44B	1.10B	857.40M
Net Income	2.26B	1.23B	984.59M	757.52M	664.35M
Balance Sheet
Total Assets	13.07B	10.33B	9.42B	8.75B	8.03B
Cash, Cash Equivalents and Short-Term Investments	4.05B	1.59B	1.57B	1.58B	1.24B
Total Debt	684.46M	687.80M	656.37M	666.77M	663.49M
Total Liabilities	4.05B	4.15B	3.86B	3.45B	3.12B
Stockholders Equity	8.99B	6.15B	5.52B	5.30B	4.91B
Cash Flow
Free Cash Flow	1.28B	1.51B	1.60B	1.40B	832.55M
Operating Cash Flow	1.41B	1.70B	1.74B	1.49B	991.31M
Investing Cash Flow	1.22B	-482.10M	-572.62M	-549.03M	-360.42M
Financing Cash Flow	-181.30M	-1.20B	-1.12B	-748.75M	-140.61M

Synopsys Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 633.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNPS, the sentiment is Positive. The current price of 633.47 is above the 20-day moving average (MA) of 585.81, above the 50-day MA of 527.39, and above the 200-day MA of 500.94, indicating a bullish trend. The MACD of 31.31 indicates Negative momentum. The RSI at 70.25 is Negative, neither overbought nor oversold. The STOCH value of 84.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNPS.

Synopsys Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNPS	77 Outperform	$117.22B	45.62	15.82%	―	0.30%	50.17%
CRWD	77 Outperform	$116.03B	721.64	-5.76%	―	25.94%	-226.80%
PANW	76 Outperform	$129.25B	104.74	21.16%	―	13.91%	-50.96%
ZS	72 Outperform	$45.16B	―	-2.68%	―	25.46%	49.20%
FTNT	69 Neutral	$76.47B	41.12	205.91%	―	13.83%	58.13%
CYBR	67 Neutral	$21.85B	1,777.39	-10.35%	―	39.45%	-982.51%
Sector *	62 Neutral	$35.05B	6.90	-11.57%	2.06%	6.28%	-15.90%

Synopsys Corporate Events

Synopsys Completes Acquisition of Ansys to Boost Innovation

On July 17, 2025, Synopsys completed its acquisition of Ansys, merging leaders in silicon design and system simulation to enhance AI-powered product innovation. This strategic move positions Synopsys to capture a larger share of the $31 billion total addressable market, with plans to deliver integrated technology solutions by 2026, thereby strengthening its industry position and financial performance.

The most recent analyst rating on (SNPS) stock is a Buy with a $620.00 price target. To see the full list of analyst forecasts on Synopsys stock, see the SNPS Stock Forecast page.

Synopsys Receives Approval for Ansys Acquisition

On July 14, 2025, Synopsys announced it received all necessary approvals to proceed with its acquisition of Ansys, with the transaction expected to close on July 17, 2025. This strategic acquisition aims to combine Synopsys’ silicon design and IP solutions with Ansys’ simulation and analysis portfolio, positioning the merged entity as a leader in engineering solutions from silicon to systems and enabling customers to innovate AI-powered products rapidly.

The most recent analyst rating on (SNPS) stock is a Buy with a $620.00 price target. To see the full list of analyst forecasts on Synopsys stock, see the SNPS Stock Forecast page.

Synopsys Restores Access After U.S. Lifts Export Ban

On July 2, 2025, Synopsys announced that the U.S. Department of Commerce’s Bureau of Industry and Security has rescinded export restrictions related to China, which were initially communicated on May 29, 2025. The company is now working to restore access to its products in China and is assessing the impact of these export restrictions on its business operations and financial performance.

The most recent analyst rating on (SNPS) stock is a Buy with a $630.00 price target. To see the full list of analyst forecasts on Synopsys stock, see the SNPS Stock Forecast page.

Synopsys Evaluates Impact of New Export Restrictions

On May 29, 2025, Synopsys announced it received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce regarding new export restrictions related to China. The company is currently evaluating the potential impact of these restrictions on its business operations, financial results, and overall financial condition.

The most recent analyst rating on (SNPS) stock is a Buy with a $630.00 price target. To see the full list of analyst forecasts on Synopsys stock, see the SNPS Stock Forecast page.