SYNOPSYS INC (SNPS) Stock Fundamental Analysis
NASDAQ:SNPS - Nasdaq - US8716071076 - Common Stock - Currency: USD
Taking everything into account, SNPS scores 6 out of 10 in our fundamental rating. SNPS was compared to 282 industry peers in the Software industry. While SNPS belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. SNPS is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SNPS was profitable.
SNPS had a positive operating cash flow in the past year.
SNPS had positive earnings in each of the past 5 years.
SNPS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.11%, SNPS belongs to the top of the industry, outperforming 84.75% of the companies in the same industry.
SNPS has a Return On Equity of 21.82%. This is amongst the best in the industry. SNPS outperforms 87.23% of its industry peers.
SNPS's Return On Invested Capital of 4.81% is fine compared to the rest of the industry. SNPS outperforms 74.82% of its industry peers.
SNPS had an Average Return On Invested Capital over the past 3 years of 12.78%. This is in line with the industry average of 12.63%.
The 3 year average ROIC (12.78%) for SNPS is well above the current ROIC(4.81%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.11% | ||
| ROE | 21.82% | ||
| ROIC | 4.81% |
ROA(3y)13.22%
ROA(5y)11.32%
ROE(3y)21.01%
ROE(5y)18.18%
ROIC(3y)12.78%
ROIC(5y)11.28%
1.3 Margins
SNPS has a Profit Margin of 34.77%. This is amongst the best in the industry. SNPS outperforms 95.04% of its industry peers.
SNPS's Profit Margin has improved in the last couple of years.
SNPS has a better Operating Margin (20.88%) than 88.30% of its industry peers.
In the last couple of years the Operating Margin of SNPS has grown nicely.
SNPS's Gross Margin of 79.84% is amongst the best of the industry. SNPS outperforms 80.14% of its industry peers.
In the last couple of years the Gross Margin of SNPS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.88% | ||
| PM (TTM) | 34.77% | ||
| GM | 79.84% |
OM growth 3Y6.59%
OM growth 5Y6.25%
PM growth 3Y27.03%
PM growth 5Y18.45%
GM growth 3Y0.07%
GM growth 5Y0.53%
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 more shares outstanding
Compared to 5 years ago, SNPS has more shares outstanding
The debt/assets ratio for SNPS has been reduced compared to a year ago.
2.2 Solvency
SNPS has an Altman-Z score of 4.79. This indicates that SNPS is financially healthy and has little risk of bankruptcy at the moment.
SNPS has a Altman-Z score of 4.79. This is in the better half of the industry: SNPS outperforms 69.15% of its industry peers.
The Debt to FCF ratio of SNPS is 9.41, which is on the high side as it means it would take SNPS, 9.41 years of fcf income to pay off all of its debts.
SNPS has a Debt to FCF ratio (9.41) which is in line with its industry peers.
A Debt/Equity ratio of 1.01 is on the high side and indicates that SNPS has dependencies on debt financing.
SNPS's Debt to Equity ratio of 1.01 is on the low side compared to the rest of the industry. SNPS is outperformed by 72.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 9.41 | ||
| Altman-Z | 4.79 |
ROIC/WACC0.44
WACC10.95%
2.3 Liquidity
A Current Ratio of 7.02 indicates that SNPS has no problem at all paying its short term obligations.
SNPS has a Current ratio of 7.02. This is amongst the best in the industry. SNPS outperforms 91.13% of its industry peers.
SNPS has a Quick Ratio of 6.85. This indicates that SNPS is financially healthy and has no problem in meeting its short term obligations.
SNPS's Quick ratio of 6.85 is amongst the best of the industry. SNPS outperforms 91.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 7.02 | ||
| Quick Ratio | 6.85 |
3. Growth
3.1 Past
SNPS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.30%.
SNPS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 23.99% yearly.
Looking at the last year, SNPS shows a small growth in Revenue. The Revenue has grown by 7.50% in the last year.
The Revenue has been growing by 12.76% on average over the past years. This is quite good.
EPS 1Y (TTM)7.3%
EPS 3Y25.03%
EPS 5Y23.99%
EPS Q2Q%22.33%
Revenue 1Y (TTM)7.5%
Revenue growth 3Y13.38%
Revenue growth 5Y12.76%
Sales Q2Q%10.28%
3.2 Future
The Earnings Per Share is expected to grow by 12.72% on average over the next years. This is quite good.
SNPS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.63% yearly.
EPS Next Y13.6%
EPS Next 2Y14.07%
EPS Next 3Y15.21%
EPS Next 5Y12.72%
Revenue Next Year10.34%
Revenue Next 2Y11.4%
Revenue Next 3Y12.41%
Revenue Next 5Y12.63%
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
With a Price/Earnings ratio of 34.29, SNPS can be considered very expensive at the moment.
66.31% of the companies in the same industry are more expensive than SNPS, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.25, SNPS is valued a bit more expensive.
The Price/Forward Earnings ratio is 26.63, which means the current valuation is very expensive for SNPS.
Based on the Price/Forward Earnings ratio, SNPS is valued a bit cheaper than 65.96% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of SNPS to the average of the S&P500 Index (22.15), we can say SNPS is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.29 | ||
| Fwd PE | 26.63 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SNPS indicates a somewhat cheap valuation: SNPS is cheaper than 69.50% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SNPS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 67.17 | ||
| EV/EBITDA | 42.11 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SNPS does not grow enough to justify the current Price/Earnings ratio.
SNPS has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as SNPS's earnings are expected to grow with 15.21% in the coming years.
PEG (NY)2.52
PEG (5Y)1.43
EPS Next 2Y14.07%
EPS Next 3Y15.21%
5. Dividend
5.1 Amount
No dividends for SNPS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
463.98
+8.99 (+1.98%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners91.02%
Inst Owner Change4.31%
Ins Owners0.41%
Ins Owner Change4.45%
Market Cap71.74B
Analysts82.96
Price Target607.27 (30.88%)
Short Float %2.94%
Short Ratio3.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)5.41%
Min EPS beat(2)4.52%
Max EPS beat(2)6.3%
EPS beat(4)4
Avg EPS beat(4)3.6%
Min EPS beat(4)0.99%
Max EPS beat(4)6.3%
EPS beat(8)7
Avg EPS beat(8)2.65%
EPS beat(12)11
Avg EPS beat(12)2.5%
EPS beat(16)13
Avg EPS beat(16)2.03%
Revenue beat(2)0
Avg Revenue beat(2)-2.12%
Min Revenue beat(2)-2.65%
Max Revenue beat(2)-1.58%
Revenue beat(4)0
Avg Revenue beat(4)-1.84%
Min Revenue beat(4)-2.65%
Max Revenue beat(4)-1.5%
Revenue beat(8)0
Avg Revenue beat(8)-1.95%
Revenue beat(12)0
Avg Revenue beat(12)-5.45%
Revenue beat(16)0
Avg Revenue beat(16)-4.38%
PT rev (1m)-3.88%
PT rev (3m)-6%
EPS NQ rev (1m)-0.1%
EPS NQ rev (3m)0.89%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.12%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.29 | ||
| Fwd PE | 26.63 | ||
| P/S | 11.53 | ||
| P/FCF | 67.17 | ||
| P/OCF | 58.51 | ||
| P/B | 7.24 | ||
| P/tB | 11.42 | ||
| EV/EBITDA | 42.11 |
EPS(TTM)13.53
EY2.92%
EPS(NY)17.42
Fwd EY3.76%
FCF(TTM)6.91
FCFY1.49%
OCF(TTM)7.93
OCFY1.71%
SpS40.24
BVpS64.13
TBVpS40.62
PEG (NY)2.52
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.11% | ||
| ROE | 21.82% | ||
| ROCE | 6.09% | ||
| ROIC | 4.81% | ||
| ROICexc | 14.48% | ||
| ROICexgc | 29.74% | ||
| OM | 20.88% | ||
| PM (TTM) | 34.77% | ||
| GM | 79.84% | ||
| FCFM | 17.17% |
ROA(3y)13.22%
ROA(5y)11.32%
ROE(3y)21.01%
ROE(5y)18.18%
ROIC(3y)12.78%
ROIC(5y)11.28%
ROICexc(3y)17.68%
ROICexc(5y)15.31%
ROICexgc(3y)75.65%
ROICexgc(5y)68.48%
ROCE(3y)16.17%
ROCE(5y)14.27%
ROICexcg growth 3Y-16.41%
ROICexcg growth 5Y-15.59%
ROICexc growth 3Y9.63%
ROICexc growth 5Y8.74%
OM growth 3Y6.59%
OM growth 5Y6.25%
PM growth 3Y27.03%
PM growth 5Y18.45%
GM growth 3Y0.07%
GM growth 5Y0.53%
F-Score3
Asset Turnover0.26
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.01 | ||
| Debt/FCF | 9.41 | ||
| Debt/EBITDA | 6.4 | ||
| Cap/Depr | 58.99% | ||
| Cap/Sales | 2.54% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.23% | ||
| Profit Quality | 49.37% | ||
| Current Ratio | 7.02 | ||
| Quick Ratio | 6.85 | ||
| Altman-Z | 4.79 |
F-Score3
WACC10.95%
ROIC/WACC0.44
Cap/Depr(3y)179.61%
Cap/Depr(5y)180.51%
Cap/Sales(3y)8.65%
Cap/Sales(5y)9%
Profit Quality(3y)89.35%
Profit Quality(5y)101.69%
High Growth Momentum
Growth
EPS 1Y (TTM)7.3%
EPS 3Y25.03%
EPS 5Y23.99%
EPS Q2Q%22.33%
EPS Next Y13.6%
EPS Next 2Y14.07%
EPS Next 3Y15.21%
EPS Next 5Y12.72%
Revenue 1Y (TTM)7.5%
Revenue growth 3Y13.38%
Revenue growth 5Y12.76%
Sales Q2Q%10.28%
Revenue Next Year10.34%
Revenue Next 2Y11.4%
Revenue Next 3Y12.41%
Revenue Next 5Y12.63%
EBIT growth 1Y-9.11%
EBIT growth 3Y20.85%
EBIT growth 5Y19.81%
EBIT Next Year20.94%
EBIT Next 3Y17.49%
EBIT Next 5YN/A
FCF growth 1Y-5.73%
FCF growth 3Y0.78%
FCF growth 5Y14.95%
OCF growth 1Y-25.73%
OCF growth 3Y-1.95%
OCF growth 5Y11.94%