In the latest close session, Synopsys (SNPS) was up +2.11% at $525.34. The stock's performance was ahead of the S&P 500's daily gain of 0.65%. Elsewhere, the Dow saw an upswing of 0.48%, while the tech-heavy Nasdaq appreciated by 0.82%.
Shares of the maker of software used to test and develop chips have appreciated by 7.8% over the course of the past month, outperforming the Computer and Technology sector's loss of 1.6%, and the S&P 500's gain of 1.15%.
Analysts and investors alike will be keeping a close eye on the performance of Synopsys in its upcoming earnings disclosure. On that day, Synopsys is projected to report earnings of $3.56 per share, which would represent year-over-year growth of 17.49%. Simultaneously, our latest consensus estimate expects the revenue to be $2.39 billion, showing a 64.28% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $14.4 per share and revenue of $9.63 billion, which would represent changes of +11.54% and +36.55%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Synopsys. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 10.61% higher. Synopsys is holding a Zacks Rank of #3 (Hold) right now.
In the context of valuation, Synopsys is at present trading with a Forward P/E ratio of 35.74. This signifies a premium in comparison to the average Forward P/E of 22.72 for its industry.
We can additionally observe that SNPS currently boasts a PEG ratio of 3.01. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 1.91.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 37% of all 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Synopsys, Inc. (SNPS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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