Synopsys (SNPS) AI Stock Analysis

Synopsys

(BMV:SNPS)

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Positive Factors

Mission-critical recurring revenueSynopsys sells mission-critical tools and proven IP that are deeply embedded in customer design processes. Long chip-development cycles, recurring licenses, maintenance, and support can create durable revenue visibility and raise switching costs across semiconductor programs.

Negative Factors

High absolute debt burdenThe sharp increase in absolute debt reduces financial flexibility and makes cash-flow coverage more important. Although debt-to-equity leverage is moderate, servicing and repaying this balance could constrain acquisitions, investment, or shareholder returns if operating conditions weaken.

Synopsys (SNPS) vs. SPDR S&P 500 ETF (SPY)

Market Cap: MXN 89.61B
Dividend Yield: ―
Average Volume (3M): 600
Price to Earnings (P/E): 80.9
Beta (1Y): -0.47
Revenue Growth: 32.25%
EPS Growth: -59.89%
Country: Mexico
Employees: 28,000
Sector: Technology
Sector Strength: 61
Industry: Software - Infrastructure

Synopsys Business Overview & Revenue Model

Company Description

Synopsys, Inc. is a leading provider of electronic design automation (EDA) software, instrumental in the creation and validation of integrated circuits. The company offers a robust portfolio of platforms, including the Fusion Design Platform for digi...

Synopsys Earnings Call Summary

Earnings Call Date:Aug 25, 2026(Q3-2026)|% Change Since:26.09%|Next Earnings Date:Dec 01, 2026

Earnings Call SentimentPositive

The call was broadly positive: the company reported strong Q3 results with revenue up ~42% YoY, non-GAAP margin and EPS beating guidance, significant cash generation, ahead-of-schedule synergy realization, and raised full-year guidance. Strategic milestones — the Ansys integration anniversary, the Multiphysics Fusion launch, agentic AI demonstrations, robust EDA momentum and notable IP wins — underpin confidence in multi-year growth. Near-term headwinds include a large absolute debt balance (~$10B), increased restructuring/GAAP charges, a modest backlog decline tied to a divestiture, and the expectation that some new product-driven revenue (e.g., Multiphysics Fusion) will contribute meaningfully only beginning in 2027. Overall, the positive operational execution, guidance raise and pipeline momentum outweigh the limited near-term negatives.

Positive Updates

Quarterly Revenue and EPS Beat

Q3 revenue of $2.477 billion, up ~42% year-over-year (includes ~ $711M Ansys contribution). Non-GAAP operating margin of 41.6% and non-GAAP EPS of $3.91 — all above the high end of guidance.

Negative Updates

High Absolute Debt Load

Total debt at the end of Q3 was approximately $10 billion, a meaningful leverage metric investors will monitor despite strong cash balances.

Company Guidance

Synopsys raised its fiscal 2026 outlook, guiding total revenue to $9.69–$9.74 billion (midpoint +$50M) with Ansys revenue ~ $2.98 billion (up $20M); total GAAP costs/expenses $8.667–$8.742 billion and total non‑GAAP costs/expenses $5.67–$5.70 billion, implying a non‑GAAP operating margin of 41.5% at the midpoint (up 50 bps). GAAP EPS is forecast at $3.84–$4.08 and non‑GAAP EPS at $15.04–$15.10 (midpoint +$0.31); cash from operations was raised to ~ $2.8 billion (up $500M), CapEx trimmed to ~$225 million and free cash flow is expected to be ~ $2.6 billion (up $600M). For Q4 they guide revenue of $2.53–$2.58 billion, GAAP costs $2.225–$2.30 billion, non‑GAAP costs $1.45–$1.48 billion, GAAP EPS $0.60–$0.85 and non‑GAAP EPS $4.10–$4.16, and they expect double‑digit organic EDA growth in Q4 and for the full year with sequential IP growth in Q4.

Synopsys Risk Analysis

Synopsys disclosed 29 risk factors in its most recent earnings report. Synopsys reported the most risks in the "Tech & Innovation" category.

Tech & Innovation - Risks related to the company’s reliance on technology and ability to make innovative products

Latest Risks Added

0 New Risks

Synopsys Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

MX:SNPS against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRWD	80Outperform	$256.42B	6869.60	1.29%	―	24.30%	―
PANW	73Outperform	$299.56B	764.61	1.68%	―	24.49%	-68.55%
FTNT	72Outperform	$99.84B	40.71	151.52%	―	20.23%	26.26%
TENB	66Neutral	$5.59B	329.97	8.46%	―	9.53%	―
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SABR	52Neutral	$653.80M	0.92	-69.54%	―	-3.03%	―

* Technology Sector Average

Performance Comparison

MX:SNPS and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
MX:SNPS	Synopsys	8806.00	577.00	7.01%
FTNT	Fortinet	126.21	40.99	48.10%
PANW	Palo Alto Networks	351.72	137.20	63.96%
SABR	Sabre Corp	1.67	-0.33	-16.50%
TENB	Tenable Holdings	47.45	19.39	69.10%
CRWD	Crowdstrike Holdings	241.81	108.33	81.16%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Synopsys AI Stock Analysis