SYNOPSYS INC (SNPS)
US8716071076 - Common Stock
We assign a fundamental rating of 7 out of 10 to SNPS. SNPS was compared to 277 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 is growing strongly while it is still valued neutral. This is a good combination! This makes SNPS very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year SNPS was profitable.
SNPS had a positive operating cash flow in the past year.
In the past 5 years SNPS has always been profitable.
Each year in the past 5 years SNPS had a positive operating cash flow.
1.2 Ratios
SNPS has a Return On Assets of 13.33%. This is amongst the best in the industry. SNPS outperforms 93.07% of its industry peers.
SNPS's Return On Equity of 21.10% is amongst the best of the industry. SNPS outperforms 90.88% of its industry peers.
With an excellent Return On Invested Capital value of 15.98%, SNPS belongs to the best of the industry, outperforming 93.43% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for SNPS is above the industry average of 10.38%.
The last Return On Invested Capital (15.98%) for SNPS is above the 3 year average (14.39%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.33% | ||
| ROE | 21.1% | ||
| ROIC | 15.98% |
ROA(3y)10.34%
ROA(5y)9.52%
ROE(3y)17.39%
ROE(5y)15.75%
ROIC(3y)14.39%
ROIC(5y)12.68%
1.3 Margins
The Profit Margin of SNPS (22.96%) is better than 92.34% of its industry peers.
In the last couple of years the Profit Margin of SNPS has grown nicely.
SNPS has a Operating Margin of 22.98%. This is amongst the best in the industry. SNPS outperforms 92.70% of its industry peers.
In the last couple of years the Operating Margin of SNPS has grown nicely.
The Gross Margin of SNPS (79.33%) is better than 80.66% of its industry peers.
SNPS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.98% | ||
| PM (TTM) | 22.96% | ||
| GM | 79.33% |
OM growth 3Y10.35%
OM growth 5Y14.03%
PM growth 3Y5.31%
PM growth 5Y8.72%
GM growth 3Y0.27%
GM growth 5Y0.69%
2. Health
2.1 Basic Checks
SNPS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, SNPS has less shares outstanding
The number of shares outstanding for SNPS has been increased compared to 5 years ago.
The debt/assets ratio for SNPS has been reduced compared to a year ago.
2.2 Solvency
SNPS has an Altman-Z score of 15.02. This indicates that SNPS is financially healthy and has little risk of bankruptcy at the moment.
SNPS's Altman-Z score of 15.02 is amongst the best of the industry. SNPS outperforms 94.53% of its industry peers.
SNPS has a debt to FCF ratio of 0.02. This is a very positive value and a sign of high solvency as it would only need 0.02 years to pay back of all of its debts.
The Debt to FCF ratio of SNPS (0.02) is better than 83.21% of its industry peers.
SNPS has a Debt/Equity ratio of 0.00. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.00, SNPS is in the better half of the industry, outperforming 68.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.02 | ||
| Altman-Z | 15.02 |
ROIC/WACC1.6
WACC10.01%
2.3 Liquidity
SNPS has a Current Ratio of 1.29. This is a normal value and indicates that SNPS is financially healthy and should not expect problems in meeting its short term obligations.
SNPS has a worse Current ratio (1.29) than 63.14% of its industry peers.
SNPS has a Quick Ratio of 1.14. This is a normal value and indicates that SNPS is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of SNPS (1.14) is worse than 69.71% of its industry peers.
SNPS does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
SNPS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 33.08%, which is quite impressive.
The Earnings Per Share has been growing by 23.45% on average over the past years. This is a very strong growth
SNPS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 18.52%.
Measured over the past years, SNPS shows a quite strong growth in Revenue. The Revenue has been growing by 13.36% on average per year.
EPS 1Y (TTM)33.08%
EPS 3Y26.41%
EPS 5Y23.45%
EPS growth Q2Q35.88%
Revenue 1Y (TTM)18.52%
Revenue growth 3Y16.6%
Revenue growth 5Y13.36%
Revenue growth Q2Q21.15%
3.2 Future
The Earnings Per Share is expected to grow by 16.69% on average over the next years. This is quite good.
Based on estimates for the next years, SNPS will show a quite strong growth in Revenue. The Revenue will grow by 12.80% on average per year.
EPS Next Y22.47%
EPS Next 2Y19.14%
EPS Next 3Y20.18%
EPS Next 5Y16.69%
Revenue Next Year11.91%
Revenue Next 2Y12.55%
Revenue Next 3Y13.49%
Revenue Next 5Y12.8%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 45.45, which means the current valuation is very expensive for SNPS.
66.06% of the companies in the same industry are more expensive than SNPS, based on the Price/Earnings ratio.
SNPS is valuated expensively when we compare the Price/Earnings ratio to 28.05, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 34.71, SNPS can be considered very expensive at the moment.
SNPS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SNPS is cheaper than 64.60% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SNPS to the average of the S&P500 Index (20.30), we can say SNPS is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.45 | ||
| Fwd PE | 34.71 |
4.2 Price Multiples
SNPS's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SNPS is cheaper than 69.34% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as SNPS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 88.94 | ||
| EV/EBITDA | 49.68 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of SNPS may justify a higher PE ratio.
A more expensive valuation may be justified as SNPS's earnings are expected to grow with 20.18% in the coming years.
PEG (NY)2.02
PEG (5Y)1.94
EPS Next 2Y19.14%
EPS Next 3Y20.18%
5. Dividend
5.1 Amount
No dividends for SNPS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SYNOPSYS INC
NASDAQ:SNPS (5/9/2024, 10:08:51 AM)
552.2
+1.71 (+0.31%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap84.23B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 45.45 | ||
| Fwd PE | 34.71 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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FCF(TTM)
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OCF(TTM)
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SpS
BVpS
TBVpS
PEG (NY)2.02
PEG (5Y)1.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.33% | ||
| ROE | 21.1% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 22.98% | ||
| PM (TTM) | 22.96% | ||
| GM | 79.33% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)33.08%
EPS 3Y26.41%
EPS 5Y
EPS growth Q2Q
EPS Next Y22.47%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)18.52%
Revenue growth 3Y16.6%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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