Synopsys (SNPS) AI Stock Analysis

• Market Cap: $85.57B
• Dividend Yield: N/A
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 39.7
• Beta (1Y): 1.58
• Revenue Growth: 0.30%
• EPS Growth: 50.17%
• Country: US
• Employees: 20,000
• Sector: Technology
• Sector Strength: 91
• Industry: Software - Infrastructure
• EPS (TTM): 3.67
• Shares Outstanding: 155,160,930
• 10 Day Avg. Volume: 1,257,365
• 30 Day Avg. Volume: 1,480,269
• PEG Ratio: 8.71
• Price to Book (P/B): 7.35
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 67.26
• Enterprise Value/Market Cap: 0.81
• Enterprise Value/Revenue: 2.81
• Enterprise Value/Gross Profit: 14.02
• Enterprise Value/Ebitda: 10.87
• 1Y Price Target: $602.93
• Price Target Upside: 6.49% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

• Rating: 75 Outperform
• Price Target: $617.00 ▲(8.97%Upside)

Synopsys' strong financial performance and positive earnings call sentiment are significant factors driving the overall score. However, high valuation and potential risks from new export restrictions and overbought technical indicators temper the outlook.

Positive Factors

Acquisition Progress

Synopsys is in advanced stages of obtaining final regulatory approval for its Ansys acquisition, indicating progress in the deal.

Trade Relations

Improving trade negotiations between the US and China are seen as a positive development for deal approval.

Negative Factors

China Market Risks

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

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.

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 exhibits strong financial health with consistent revenue growth, robust profitability, and efficient cash management. While there are minor fluctuations in operational margins, the company's overall financial foundation is solid.

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	6.22B	6.13B	5.84B	5.08B	4.20B	3.69B
Gross Profit	4.97B	4.88B	4.62B	4.02B	3.34B	2.89B
EBITDA	1.50B	1.65B	1.65B	1.44B	1.10B	857.40M
Net Income	2.16B	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	687.80M	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: Positive
• Last Price: 566.19
• 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 566.19 is above the 20-day moving average (MA) of 506.03, above the 50-day MA of 494.83, and above the 200-day MA of 494.26, indicating a bullish trend. The MACD of 19.20 indicates Negative momentum. The RSI at 74.92 is Negative, neither overbought nor oversold. The STOCH value of 95.05 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
PANW	78 Outperform	$136.02B	117.92	21.16%	―	13.91%	-50.96%
FTNT	77 Outperform	$82.40B	41.24	205.91%	―	13.83%	58.13%
SNPS	75 Outperform	$85.57B	39.68	15.82%	―	0.30%	50.17%
CRWD	74 Outperform	$126.55B	721.64	-5.76%	―	25.94%	-226.80%
ZS	72 Outperform	$49.28B	―	-2.68%	―	25.46%	49.20%
CYBR	67 Neutral	$19.88B	1,777.39	-5.36%	―	35.12%	-191.84%
Sector *	63 Neutral	$34.16B	5.78	-11.85%	1.82%	5.31%	-18.32%

Synopsys Corporate Events

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.

Synopsys Stockholders Approve Equity Plan Amendments

On April 10, 2025, Synopsys, Inc. held its Annual Meeting of Stockholders, where stockholders approved amendments to the 2006 Employee Equity Incentive Plan and the Employee Stock Purchase Plan. These amendments include increasing the number of shares available for issuance and aligning the plans with current financial practices and policies. The meeting also resulted in the election of nine directors to the board and the ratification of KPMG LLP as the independent accounting firm for the fiscal year ending October 31, 2025. However, a proposal regarding shareholder ratification of golden parachutes was not approved.