Synopsys (SNPS) AI Stock Analysis

• Market Cap: $113.39B
• Dividend Yield: N/A
• Average Volume (3M): 2.02M
• Price to Earnings (P/E): 43.3
• Beta (1Y): 1.54
• Revenue Growth: 0.30%
• EPS Growth: 50.17%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 85
• Industry: Software - Infrastructure
• EPS (TTM): 3.67
• Shares Outstanding: 185,043,640
• 10 Day Avg. Volume: 1,068,250
• 30 Day Avg. Volume: 2,017,088
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.60
• Enterprise Value/Revenue: 10.96
• Enterprise Value/Gross Profit: 14.30
• Enterprise Value/Ebitda: 36.76
• 1Y Price Target: $638.93
• Price Target Upside: 5.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 77 Outperform
• Price Target: $732.00 ▲(20.69% 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 Position

The total revenue for the combined company is expected to exceed $10 billion, solidifying Synopsys' lead in the chip-to-system design software industry.

Regulatory Approval

China has conditionally approved Synopsys' acquisition of Ansys, and the company expects to close the deal soon.

Strategic Acquisition

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

Negative Factors

Export Restrictions

SNPS has suspended its F3Q25 and full year F2025 guidance after receiving a letter from the Bureau of Industry and Security of the U.S. Department of Commerce about new export restrictions related to China.

Revenue Dependency

China accounts for 13.8% of trailing-twelve-month revenue, and with the stock down since the halt on chip design software sales to China, the immediate potential downside has largely been priced-in.

Synopsys Business Overview & Revenue Model

Company Description

Synopsys, Inc. is a leading provider of electronic design automation (EDA) software and services, catering primarily to the semiconductor and electronics industries. Founded in 1986 and headquartered in Mountain View, California, Synopsys specializes in providing solutions for the design, verification, and testing of integrated circuits and systems-on-chip. The company operates in various sectors, including semiconductor design, software security, and quality, offering a comprehensive suite of products that encompasses design tools, verification solutions, and IP (intellectual property) cores.

How the Company Makes Money

Synopsys generates revenue primarily through the sale of software licenses, maintenance and support services, and professional services. Its key revenue streams include software licenses for EDA tools, which are sold on a subscription or perpetual basis, and recurring maintenance fees from existing customers. Additionally, Synopsys earns revenue from its extensive portfolio of IP offerings, which are critical for chip makers. The company also benefits from significant partnerships with leading technology firms and semiconductor manufacturers, which not only enhance its market reach but also contribute to collaborative development efforts. Furthermore, the growing demand for advanced technologies such as artificial intelligence, machine learning, and the Internet of Things (IoT) has expanded Synopsys's customer base, driving revenue growth.

Synopsys Financial Statement Overview

Summary

Synopsys shows strong financial health with consistent revenue growth, robust profitability, and effective cash management. The balance sheet is solid with a strong equity position and prudent leverage. Minor operational margin fluctuations noted, but the overall trajectory is positive.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.21B	6.12B	5.33B	5.07B	4.20B	3.68B
Gross Profit	4.76B	4.69B	4.10B	3.85B	3.30B	2.85B
EBITDA	1.85B	1.94B	1.65B	1.44B	1.10B	857.40M
Net Income	2.17B	2.26B	1.23B	984.59M	757.52M	664.35M
Balance Sheet
Total Assets	23.76B	13.07B	10.33B	9.42B	8.75B	8.03B
Cash, Cash Equivalents and Short-Term Investments	14.26B	4.05B	1.59B	1.57B	1.58B	1.24B
Total Debt	10.74B	684.46M	677.60M	656.37M	666.77M	663.49M
Total Liabilities	13.84B	4.05B	4.15B	3.86B	3.45B	3.12B
Stockholders Equity	9.92B	8.99B	6.15B	5.52B	5.30B	4.91B
Cash Flow
Free Cash Flow	1.09B	1.28B	1.51B	1.60B	1.40B	832.55M
Operating Cash Flow	1.23B	1.41B	1.70B	1.74B	1.49B	991.31M
Investing Cash Flow	1.44B	1.22B	-482.10M	-572.62M	-549.03M	-360.42M
Financing Cash Flow	9.93B	-181.30M	-1.20B	-1.12B	-748.75M	-140.61M

Synopsys Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 606.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNPS, the sentiment is Neutral. The current price of 606.52 is below the 20-day moving average (MA) of 619.74, above the 50-day MA of 569.39, and above the 200-day MA of 509.34, indicating a neutral trend. The MACD of 8.31 indicates Positive momentum. The RSI at 51.77 is Neutral, neither overbought nor oversold. The STOCH value of 23.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SNPS.

Synopsys Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNPS	77 Outperform	$113.39B	43.29	15.82%	―	0.30%	50.17%
ZS	73 Outperform	$42.80B	―	-2.68%	―	25.46%	49.20%
PANW	72 Outperform	$121.19B	115.11	17.45%	―	14.87%	-57.43%
CYBR	70 Neutral	$21.75B	1,777.39	-10.35%	―	39.45%	-982.51%
CRWD	69 Neutral	$104.34B	721.64	-5.76%	―	25.94%	-226.80%
FTNT	67 Neutral	$59.84B	31.77	165.17%	―	14.46%	48.06%
Sector *	55 Neutral	$296.27M	4.23	-5.17%	2.67%	9.75%	-67.81%

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.