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Synopsys (SNPS) Beats Stock Market Upswing: What Investors Need to Know

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The latest trading session saw Synopsys (SNPS - Free Report) ending at $539.92, denoting a +1.28% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a gain of 0.61% for the day. Elsewhere, the Dow saw an upswing of 0.97%, while the tech-heavy Nasdaq appreciated by 0.33%.

Shares of the maker of software used to test and develop chips have appreciated by 9.03% over the course of the past month, outperforming the Computer and Technology sector's gain of 8.6% and the S&P 500's gain of 5.36%.

Market participants will be closely following the financial results of Synopsys in its upcoming release. The company's upcoming EPS is projected at $3.28, signifying a 3.47% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $1.62 billion, up 1.01% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $13.12 per share and revenue of $6.13 billion, indicating changes of +17.25% and +4.93%, respectively, compared to the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Synopsys. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Synopsys holds a Zacks Rank of #3 (Hold).

Investors should also note Synopsys's current valuation metrics, including its Forward P/E ratio of 40.64. This indicates a premium in contrast to its industry's Forward P/E of 29.59.

We can also see that SNPS currently has a PEG ratio of 2.63. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 2.53 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 107, finds itself in the top 43% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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