In the latest trading session, Synopsys (SNPS) closed at $448.00, marking a +2.07% move from the previous day. The stock's change was more than the S&P 500's daily gain of 1.56%. Elsewhere, the Dow saw an upswing of 1.29%, while the tech-heavy Nasdaq appreciated by 2.21%.
Heading into today, shares of the maker of software used to test and develop chips had gained 3.17% over the past month, outpacing the Computer and Technology sector's gain of 1.06% and the S&P 500's gain of 0.41%.
Investors will be eagerly watching for the performance of Synopsys in its upcoming earnings disclosure. The company is forecasted to report an EPS of $2.79, showcasing a 17.94% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $2.25 billion, up 37.59% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $12.83 per share and revenue of $7.05 billion. These totals would mark changes of -2.8% and +12.52%, respectively, from last 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. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.94% downward. Synopsys currently has a Zacks Rank of #5 (Strong Sell).
Digging into valuation, Synopsys currently has a Forward P/E ratio of 34.2. This expresses a premium compared to the average Forward P/E of 26.75 of its industry.
One should further note that SNPS currently holds a PEG ratio of 3.01. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computer - Software industry had an average PEG ratio of 2.04 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 85, putting it in the top 35% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Synopsys, Inc. (SNPS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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