Synopsys (SNPS) ended the recent trading session at $409.11, demonstrating a -1.74% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily gain of 0.37%. Meanwhile, the Dow experienced a rise of 0.48%, and the technology-dominated Nasdaq saw an increase of 0.65%.
The maker of software used to test and develop chips's stock has dropped by 12.87% in the past month, falling short of the Computer and Technology sector's gain of 2.98% and the S&P 500's gain of 0.95%.
Analysts and investors alike will be keeping a close eye on the performance of Synopsys in its upcoming earnings disclosure. The company's earnings report is set to go public on December 10, 2025. The company is expected to report EPS of $2.79, down 17.94% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $2.25 billion, indicating a 37.59% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.83 per share and revenue of $7.05 billion, indicating changes of -2.8% and 0%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Synopsys. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Synopsys is holding a Zacks Rank of #5 (Strong Sell) right now.
Valuation is also important, so investors should note that Synopsys has a Forward P/E ratio of 29.64 right now. This expresses a premium compared to the average Forward P/E of 28.03 of its industry.
Also, we should mention that SNPS has a PEG ratio of 2.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 1.85 based on yesterday's closing prices.
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 Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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Synopsys, Inc. (SNPS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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