Want to see SNPS full AI Analyst Report?
Top Page
Synopsys
(NASDAQ:SNPS)
Select Model
Select Model
Rating:67Neutral
Price Target:
$504.00
▲(23.29% Upside)
Action:Reiterated
Date:08/28/26
The score is driven primarily by solid underlying financial fundamentals (especially strong free cash flow) and a bullish earnings call with raised guidance and improved cash flow outlook. These positives are tempered by the recent step-down in TTM profitability/returns and a much higher debt load, while valuation is a meaningful headwind due to the very high P/E. Technicals are supportive overall but not strongly momentum-driven.
Positive Factors
Raised guidance and cash generation
Higher revenue, margin and cash-flow guidance indicates strong execution and improved earnings visibility. Robust free cash flow should support investment, debt repayment and integration spending while preserving financial flexibility.
Negative Factors
Material increase in debt
The step-up in debt materially increases financial and execution risk, particularly because operating cash flow covers less than the total balance. Although cash generation is strong, deleveraging and integration demands may constrain flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Raised guidance and cash generation
Higher revenue, margin and cash-flow guidance indicates strong execution and improved earnings visibility. Robust free cash flow should support investment, debt repayment and integration spending while preserving financial flexibility.
Read all positive factors
Synopsys Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Shows profit generated from different business units, highlighting which segments drive profitability and where there might be challenges or opportunities.
Shows profit generated from different business units, highlighting which segments drive profitability and where there might be challenges or opportunities.
Data provided by:
The Fly
The FlySynopsys (SNPS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$79.72B
Dividend YieldN/A
Average Volume (3M)1.78M
Price to Earnings (P/E)72.3
Beta (1Y)1.50
Revenue Growth46.33%
EPS Growth-55.91%
CountryUS
Employees28,000
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)5.74
Shares Outstanding191,636,640
10 Day Avg. Volume2,055,724
30 Day Avg. Volume1,783,968
Financial Highlights & Ratios
PEG Ratio-1.24
Price to Book (P/B)2.57
Price to Sales (P/S)10.30
P/FCF Ratio53.88
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$562.71Price Target Upside37.65% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
EPS Forecast (FY)15.1
Revenue Forecast (FY)$9.72B
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 d...
How the Company Makes Money
Synopsys primarily makes money by licensing software and selling related services and IP to semiconductor and electronics companies.
1) EDA software licenses and subscriptions: A major revenue stream comes from providing chip design and verificat...
Synopsys Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Dec 02, 2026
Earnings Call Sentiment Positive
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.
Read all updates
Q3-2026 Updates
Positive
Negative
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.
Read all positive updates
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 Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
58
Neutral
Cash Flow
74
Positive
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.42B | 7.05B | 6.13B | 5.32B | 4.62B | 4.20B |
| Gross Profit | 6.82B | 5.43B | 4.88B | 4.29B | 3.72B | 3.34B |
| EBITDA | 3.53B | 2.50B | 1.85B | 1.56B | 1.33B | 1.01B |
| Net Income | 1.08B | 1.33B | 2.26B | 1.23B | 984.59M | 757.52M |
Balance Sheet | ||||||
| Total Assets | 47.73B | 48.22B | 13.07B | 10.33B | 9.42B | 8.75B |
| Cash, Cash Equivalents and Short-Term Investments | 3.61B | 2.96B | 4.05B | 1.59B | 1.57B | 1.58B |
| Total Debt | 10.84B | 14.29B | 684.46M | 677.60M | 656.37M | 666.77M |
| Total Liabilities | 16.57B | 19.90B | 4.05B | 4.15B | 3.86B | 3.45B |
| Stockholders Equity | 31.15B | 28.33B | 8.99B | 6.15B | 5.52B | 5.30B |
Cash Flow | ||||||
| Free Cash Flow | 2.79B | 1.35B | 1.28B | 1.51B | 1.60B | 1.40B |
| Operating Cash Flow | 2.98B | 1.52B | 1.41B | 1.70B | 1.74B | 1.49B |
| Investing Cash Flow | 918.62M | -15.91B | 1.22B | -482.10M | -572.62M | -549.03M |
| Financing Cash Flow | -2.59B | 13.39B | -181.30M | -1.20B | -1.12B | -748.75M |
Synopsys Technical Analysis
Negative
408.79
Price Trends
412.61
Negative
448.05
Negative
447.19
Negative
Market Momentum
1.49
Positive
42.59
Neutral
29.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNPS, the sentiment is Negative. The current price of 408.79 is below the 20-day moving average (MA) of 414.21, below the 50-day MA of 412.61, and below the 200-day MA of 447.19, indicating a bearish trend. The MACD of 1.49 indicates Positive momentum. The RSI at 42.59 is Neutral, neither overbought nor oversold. The STOCH value of 29.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNPS.
Synopsys Risk Analysis
Synopsys disclosed 29 risk factors in its most recent earnings report. Synopsys reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Synopsys Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $113.39B | 54.67 | 187.95% | ― | 18.77% | 12.93% | |
76 Outperform | $208.29B | 6,107.10 | 1.29% | ― | 24.30% | ― | |
68 Neutral | $267.71B | 721.61 | 1.68% | ― | 24.49% | -68.55% | |
68 Neutral | $3.77B | 550.96 | 2.41% | ― | 9.93% | ― | |
67 Neutral | $79.72B | 72.28 | 3.57% | ― | 46.33% | -55.91% | |
62 Neutral | $843.49M | 1.13 | -69.54% | ― | -3.03% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
SNPS
Synopsys
393.84
-204.30
-34.16%
FTNT
Fortinet
156.29
77.46
98.26%
PANW
Palo Alto Networks
333.26
138.80
71.38%
SABR
Sabre
2.13
0.42
24.56%
TENB
Tenable Holdings
34.25
3.20
10.31%
CRWD
CrowdStrike Holdings
213.10
108.69
104.11%
Synopsys Corporate Events
Executive/Board Changes
Synopsys Announces Transition of General Counsel Role
Neutral
Aug 12, 2026
On August 12, 2026, Synopsys, Inc. announced that Janet Lee will step down as General Counsel and Corporate Secretary, effective on the earlier of December 31, 2026, or the appointment of her successor. The company said she will then move into an ...
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.