Taking everything into account, SNPS scores 4 out of 10 in our fundamental rating. SNPS was compared to 278 industry peers in the Software industry. While SNPS has a great profitability rating, there are quite some concerns on its financial health. SNPS is valied quite expensively at the moment, while it does show a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

SNPS had positive earnings in the past year.
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 64.03% of the companies in the same industry.
The Return On Equity of SNPS (4.70%) is better than 67.27% of its industry peers.
Looking at the Return On Invested Capital, with a value of 1.62%, SNPS is in the better half of the industry, outperforming 65.47% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SNPS is below the industry average of 10.74%.
The 3 year average ROIC (8.72%) for SNPS is well above the current ROIC(1.62%). The reason for the recent decline needs to be investigated.

		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

SNPS's Profit Margin of 18.89% is amongst the best of the industry. SNPS outperforms 81.30% of its industry peers.
In the last couple of years the Profit Margin of SNPS has remained more or less at the same level.
The Operating Margin of SNPS (12.97%) is better than 78.06% of its industry peers.
In the last couple of years the Operating Margin of SNPS has declined.
SNPS has a Gross Margin of 76.98%. This is in the better half of the industry: SNPS outperforms 72.66% of its industry peers.
SNPS's Gross Margin has been stable in the last couple of years.

		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

SNPS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SNPS has more shares outstanding than it did 1 year ago.
SNPS has more shares outstanding than it did 5 years ago.
SNPS has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.45 indicates that SNPS is not in any danger for bankruptcy at the moment.
The Altman-Z score of SNPS (3.45) is better than 64.75% of its industry peers.
A Debt/Equity ratio of 0.48 indicates that SNPS is not too dependend on debt financing.
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	3.45

ROIC/WACC0.15

WACC11%

2.3 Liquidity

SNPS has a Current Ratio of 1.62. 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 Current ratio value of 1.62, SNPS perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
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.
Looking at the Quick ratio, with a value of 1.52, SNPS is in line with its industry, 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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3. Growth

3.1 Past

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

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.
SNPS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.79% yearly.

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

A Price/Earnings ratio of 38.60 indicates a quite expensive valuation of SNPS.
Compared to the rest of the industry, the Price/Earnings ratio of SNPS is on the same level as its industry peers.
SNPS is valuated rather expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 34.24 indicates a quite expensive valuation of SNPS.
The rest of the industry has a similar Price/Forward Earnings ratio as SNPS.
The average S&P500 Price/Forward Earnings ratio is at 25.98. SNPS is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	38.6
Fwd PE	34.24

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	67.29

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 a very decent 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 16.34% in the coming years.