Synopsys (SNPS) closed at $442.93 in the latest trading session, marking a -2.73% move from the prior day. This change lagged the S&P 500's daily loss of 0.99%. At the same time, the Dow lost 0.23%, and the tech-heavy Nasdaq lost 1.58%.
Coming into today, shares of the maker of software used to test and develop chips had lost 6.84% in the past month. In that same time, the Computer and Technology sector gained 7.77%, while the S&P 500 gained 3.59%.
The investment community will be paying close attention to the earnings performance of Synopsys in its upcoming release. The company is predicted to post an EPS of $2.79, indicating a 17.94% decline compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $2.25 billion, up 37.59% from the prior-year quarter.
SNPS's full-year Zacks Consensus Estimates are calling for earnings of $12.83 per share and revenue of $7.05 billion. These results would represent year-over-year changes of -2.8% and +12.52%, respectively.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Synopsys. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. As of now, Synopsys holds a Zacks Rank of #5 (Strong Sell).
Looking at valuation, Synopsys is presently trading at a Forward P/E ratio of 35.48. For comparison, its industry has an average Forward P/E of 28.42, which means Synopsys is trading at a premium to the group.
One should further note that SNPS currently holds a PEG ratio of 3.13. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software industry currently had an average PEG ratio of 2.12 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 95, placing it within the top 39% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. 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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