Overall SNPS gets a fundamental rating of 4 out of 10. We evaluated SNPS against 278 industry peers in the Software industry. SNPS scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, SNPS is valued expensive at the moment.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year SNPS was profitable.
In the past year SNPS had a positive cash flow from operations.
In the past 5 years SNPS has always been profitable.
In the past 5 years SNPS always reported a positive cash flow from operatings.

1.2 Ratios

With a decent Return On Assets value of 2.76%, SNPS is doing good in the industry, outperforming 63.67% of the companies in the same industry.
The Return On Equity of SNPS (4.70%) is better than 67.27% of its industry peers.
With a decent Return On Invested Capital value of 1.62%, SNPS is doing good in the industry, outperforming 65.47% of the companies in the same industry.
SNPS had an Average Return On Invested Capital over the past 3 years of 8.72%. This is below the industry average of 10.76%.
The last Return On Invested Capital (1.62%) for SNPS is well below the 3 year average (8.72%), which needs to be investigated, but indicates that SNPS had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	2.76%
ROE	4.7%
ROIC	1.62%

ROA(3y)10.66%

ROA(5y)10.22%

ROE(3y)16.63%

ROE(5y)16.41%

ROIC(3y)8.72%

ROIC(5y)9.91%

1.3 Margins

Looking at the Profit Margin, with a value of 18.89%, SNPS belongs to the top of the industry, outperforming 81.30% of the companies in the same industry.
In the last couple of years the Profit Margin of SNPS has remained more or less at the same level.
SNPS has a better Operating Margin (12.97%) than 78.06% of its industry peers.
In the last couple of years the Operating Margin of SNPS has declined.
SNPS has a better Gross Margin (76.98%) than 72.66% 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	12.97%
PM (TTM)	18.89%
GM	76.98%

OM growth 3Y-19.79%

OM growth 5Y-5.43%

PM growth 3Y-3.98%

PM growth 5Y0.93%

GM growth 3Y-1.5%

GM growth 5Y-0.37%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SNPS is destroying value.
SNPS has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SNPS has more shares outstanding
The debt/assets ratio for SNPS is higher compared to a year ago.

2.2 Solvency

SNPS has an Altman-Z score of 3.50. This indicates that SNPS is financially healthy and has little risk of bankruptcy at the moment.
SNPS has a better Altman-Z score (3.50) than 65.83% of its industry peers.
SNPS has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
SNPS's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. SNPS is outperformed by 65.11% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.48
Debt/FCF	N/A
Altman-Z	3.5

ROIC/WACC0.15

WACC11%

2.3 Liquidity

A Current Ratio of 1.62 indicates that SNPS should not have too much problems paying its short term obligations.
SNPS has a Current ratio of 1.62. This is comparable to the rest of the industry: SNPS outperforms 50.00% of its industry peers.
SNPS has a Quick Ratio of 1.52. This is a normal value and indicates that SNPS is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.52, SNPS perfoms like the industry average, outperforming 46.40% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	1.62
Quick Ratio	1.52

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The earnings per share for SNPS have decreased by -1.67% in the last year.
Measured over the past years, SNPS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.54% on average per year.
The Revenue has grown by 15.12% in the past year. This is quite good.
SNPS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.87% yearly.

EPS 1Y (TTM)-1.67%

EPS 3Y13.39%

EPS 5Y18.54%

EPS Q2Q%-14.71%

Revenue 1Y (TTM)15.12%

Revenue growth 3Y15.19%

Revenue growth 5Y13.87%

Sales Q2Q%37.83%

3.2 Future

SNPS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.48% yearly.
Based on estimates for the next years, SNPS will show a quite strong growth in Revenue. The Revenue will grow by 15.79% on average per year.

EPS Next Y12.73%

EPS Next 2Y15.35%

EPS Next 3Y16.34%

EPS Next 5Y14.48%

Revenue Next Year36.66%

Revenue Next 2Y23.03%

Revenue Next 3Y19.06%

Revenue Next 5Y15.79%

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.

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4. Valuation

4.1 Price/Earnings Ratio

SNPS is valuated quite expensively with a Price/Earnings ratio of 39.36.
SNPS's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of SNPS to the average of the S&P500 Index (28.60), we can say SNPS is valued slightly more expensively.
SNPS is valuated quite expensively with a Price/Forward Earnings ratio of 34.92.
SNPS's Price/Forward Earnings is on the same level as the industry average.
SNPS is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	39.36
Fwd PE	34.92

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SNPS is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	68.49

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
SNPS has a very decent profitability rating, which may justify a higher PE ratio.
SNPS's earnings are expected to grow with 16.34% in the coming years. This may justify a more expensive valuation.