SYNOPSYS INC (SYP.DE) Stock Fundamental Analysis

Europe - Frankfurt Stock Exchange - FRA:SYP - US8716071076 - Common Stock

421.5 EUR

-1.75 (-0.41%)

Last: 1/27/2026, 3:31:40 PM

Fundamental Rating

Taking everything into account, SYP scores 4 out of 10 in our fundamental rating. SYP was compared to 114 industry peers in the Software industry. SYP has a medium profitability rating, but doesn't score so well on its financial health evaluation. While showing a medium growth rate, SYP is valued expensive at the moment.

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1. Profitability

1.1 Basic Checks

In the past year SYP was profitable.
SYP had a positive operating cash flow in the past year.
In the past 5 years SYP has always been profitable.
Each year in the past 5 years SYP had a positive operating cash flow.

1.2 Ratios

The Return On Assets of SYP (2.76%) is comparable to the rest of the industry.
SYP has a Return On Equity (4.70%) which is comparable to the rest of the industry.
With a Return On Invested Capital value of 1.45%, SYP perfoms like the industry average, outperforming 48.25% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SYP is significantly below the industry average of 13.49%.
The last Return On Invested Capital (1.45%) for SYP is well below the 3 year average (7.77%), which needs to be investigated, but indicates that SYP had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	2.76%
ROE	4.7%
ROIC	1.45%

ROA(3y)10.66%

ROA(5y)10.22%

ROE(3y)16.63%

ROE(5y)16.41%

ROIC(3y)7.77%

ROIC(5y)8.83%

1.3 Margins

SYP has a better Profit Margin (18.89%) than 73.68% of its industry peers.
In the last couple of years the Profit Margin of SYP has remained more or less at the same level.
Looking at the Operating Margin, with a value of 12.97%, SYP is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
SYP's Operating Margin has declined in the last couple of years.
SYP's Gross Margin of 76.98% is fine compared to the rest of the industry. SYP outperforms 60.53% of its industry peers.
In the last couple of years the Gross Margin of SYP 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 SYP is destroying value.
The number of shares outstanding for SYP has been increased compared to 1 year ago.
SYP has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SYP has a worse debt to assets ratio.

2.2 Solvency

SYP has an Altman-Z score of 3.44. This indicates that SYP is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 3.44, SYP perfoms like the industry average, outperforming 57.02% of the companies in the same industry.
SYP has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SYP (0.48) is worse than 61.40% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.48
Debt/FCF	N/A
Altman-Z	3.44

ROIC/WACC0.13

WACC10.9%

2.3 Liquidity

A Current Ratio of 1.62 indicates that SYP should not have too much problems paying its short term obligations.
With a Current ratio value of 1.62, SYP perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
A Quick Ratio of 1.52 indicates that SYP should not have too much problems paying its short term obligations.
SYP has a Quick ratio (1.52) which is comparable to the rest of the 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

SYP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.67%.
The Earnings Per Share has been growing by 18.54% on average over the past years. This is quite good.
SYP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.12%.
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

The Earnings Per Share is expected to grow by 14.48% on average over the next years. This is quite good.
SYP 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

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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

SYP is valuated quite expensively with a Price/Earnings ratio of 38.42.
Compared to the rest of the industry, the Price/Earnings ratio of SYP is on the same level as its industry peers.
SYP is valuated rather expensively when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 34.07, SYP can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SYP is on the same level as its industry peers.
SYP is valuated rather expensively when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	38.42
Fwd PE	34.07

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SYP is valued a bit more expensive than 64.04% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	67.23

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SYP does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of SYP may justify a higher PE ratio.
A more expensive valuation may be justified as SYP's earnings are expected to grow with 16.34% in the coming years.