Why SYNOPSYS INC (NASDAQ:SNPS) qualifies as a quality stock.

Quality investors are looking for the best of the best. Companies which are growing steadily and consistently, but are also in excellent financial condition. We will have a look here to see if SYNOPSYS INC (NASDAQ:SNPS) is suited for quality investing. Investors should of course do their own research, but we spotted SYNOPSYS INC showing up in our Caviar Cruise quality screen, so it may be worth spending some more time on it.

Some of the quality metrics of SNPS highlighted

• SNPS has shown strong performance in revenue growth over the past 5 years, with a 12.76% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
• With a notable ROIC excluding cash and goodwill at 30.42%, SNPS demonstrates its commitment to generating sustainable returns for shareholders. This metric emphasizes the company's effective use of capital and its ability to deliver long-term value.
• With a Debt/Free Cash Flow Ratio of 0.01, SNPS exhibits solid financial health and responsible debt management practices. This ratio indicates the company's ability to generate ample free cash flow to meet its debt obligations and pursue growth opportunities.
• The Profit Quality (5-year) of SNPS stands at 102.0%, highlighting its ability to consistently generate reliable profits. This metric underscores the company's strong business fundamentals and reinforces its position as a financially stable entity.
• SNPS has demonstrated consistent growth in EBIT over the past 5 years, with a strong 19.81%. This signifies the company's ability to generate sustainable earnings and reflects its positive financial trajectory.
• SNPS has achieved superior EBIT 5-year growth compared to its Revenue 5-year growth. This demonstrates the company's ability to maximize its profitability through effective cost management and operational strategies.

Zooming in on the fundamentals.

As part of its analysis, ChartMill provides a comprehensive Fundamental Rating for each stock. This rating, ranging from 0 to 10, is updated on a daily basis and is based on the evaluation of various fundamental indicators and properties.

Taking everything into account, SNPS scores 6 out of 10 in our fundamental rating. SNPS was compared to 279 industry peers in the Software industry. SNPS scores excellent points on both the profitability and health parts. This is a solid base for a good stock. SNPS has a correct valuation and a medium growth rate. This makes SNPS very considerable for quality investing!

For an up to date full fundamental analysis you can check the fundamental report of SNPS

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.