SYNOPSYS INC (SNPS)
US8716071076 - Common Stock
We assign a fundamental rating of 7 out of 10 to SNPS. 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 shows excellent growth, but is valued quite expensive already. This makes SNPS very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
SNPS had positive earnings in the past year.
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
SNPS has a better Return On Assets (12.86%) than 91.40% of its industry peers.
SNPS has a better Return On Equity (19.44%) than 88.53% of its industry peers.
The Return On Invested Capital of SNPS (14.51%) is better than 92.11% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SNPS is above the industry average of 11.54%.
The last Return On Invested Capital (14.51%) for SNPS is above the 3 year average (14.39%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.86% | ||
| ROE | 19.44% | ||
| ROIC | 14.51% |
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
SNPS has a Profit Margin of 24.60%. This is amongst the best in the industry. SNPS outperforms 92.11% of its industry peers.
In the last couple of years the Profit Margin of SNPS has grown nicely.
With an excellent Operating Margin value of 24.20%, SNPS belongs to the best of the industry, outperforming 92.11% of the companies in the same industry.
In the last couple of years the Operating Margin of SNPS has grown nicely.
The Gross Margin of SNPS (80.25%) is better than 80.29% of its industry peers.
SNPS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 24.2% | ||
| PM (TTM) | 24.6% | ||
| GM | 80.25% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SNPS is creating some value.
Compared to 1 year ago, SNPS has less shares outstanding
SNPS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SNPS has an improved debt to assets ratio.
2.2 Solvency
SNPS has an Altman-Z score of 15.21. This indicates that SNPS is financially healthy and has little risk of bankruptcy at the moment.
SNPS has a Altman-Z score of 15.21. This is amongst the best in the industry. SNPS outperforms 89.96% of its industry peers.
The Debt to FCF ratio of SNPS is 0.03, which is an excellent value as it means it would take SNPS, only 0.03 years of fcf income to pay off all of its debts.
SNPS has a better Debt to FCF ratio (0.03) than 82.08% of its industry peers.
A Debt/Equity ratio of 0.00 indicates that SNPS is not too dependend on debt financing.
The Debt to Equity ratio of SNPS (0.00) is better than 65.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.03 | ||
| Altman-Z | 15.21 |
ROIC/WACC1.22
WACC11.9%
2.3 Liquidity
A Current Ratio of 2.02 indicates that SNPS has no problem at all paying its short term obligations.
SNPS has a better Current ratio (2.02) than 60.22% of its industry peers.
SNPS has a Quick Ratio of 1.87. This is a normal value and indicates that SNPS is financially healthy and should not expect problems in meeting its short term obligations.
SNPS's Quick ratio of 1.87 is in line compared to the rest of the industry. SNPS outperforms 56.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.87 |
3. Growth
3.1 Past
SNPS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 32.26%, which is quite impressive.
Measured over the past years, SNPS shows a very strong growth in Earnings Per Share. The EPS has been growing by 23.45% on average per year.
SNPS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.18%.
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)32.26%
EPS 3Y26.41%
EPS 5Y23.45%
EPS Q2Q%19.1%
Revenue 1Y (TTM)10.18%
Revenue growth 3Y16.6%
Revenue growth 5Y13.36%
Sales Q2Q%2.59%
3.2 Future
The Earnings Per Share is expected to grow by 14.99% 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 10.88% on average per year.
EPS Next Y19.42%
EPS Next 2Y16.31%
EPS Next 3Y16.13%
EPS Next 5Y14.99%
Revenue Next Year5.33%
Revenue Next 2Y8.87%
Revenue Next 3Y10.49%
Revenue Next 5Y10.88%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
SNPS is valuated quite expensively with a Price/Earnings ratio of 42.66.
Based on the Price/Earnings ratio, SNPS is valued a bit cheaper than 65.59% of the companies in the same industry.
When comparing the Price/Earnings ratio of SNPS to the average of the S&P500 Index (28.96), we can say SNPS is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 37.02, the valuation of SNPS can be described as expensive.
SNPS's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SNPS is cheaper than 62.72% of the companies in the same industry.
SNPS is valuated expensively when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.66 | ||
| Fwd PE | 37.02 |
4.2 Price Multiples
68.46% of the companies in the same industry are more expensive than SNPS, based on the Enterprise Value to EBITDA ratio.
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 | 144.91 | ||
| EV/EBITDA | 48.55 |
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.
SNPS's earnings are expected to grow with 16.13% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.2
PEG (5Y)1.82
EPS Next 2Y16.31%
EPS Next 3Y16.13%
5. Dividend
5.1 Amount
SNPS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SYNOPSYS INC
NASDAQ:SNPS (11/22/2024, 11:08:52 AM)
561.34
+3.4 (+0.61%)
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 Cap86.23B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Div Incr Years
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Surprises & Revisions
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.66 | ||
| Fwd PE | 37.02 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.2
PEG (5Y)1.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.86% | ||
| ROE | 19.44% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 24.2% | ||
| PM (TTM) | 24.6% | ||
| GM | 80.25% | ||
| 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 Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.02 | ||
| Quick Ratio | 1.87 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)32.26%
EPS 3Y26.41%
EPS 5Y
EPS Q2Q%
EPS Next Y19.42%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.18%
Revenue growth 3Y16.6%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
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FCF growth 3Y
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