SYNOPSYS INC (SYP.DE) Stock Fundamental Analysis

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

422.35 EUR

-10.3 (-2.38%)

Last: 1/26/2026, 5:29:50 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. SYP is quite expensive at the moment. It does show a decent growth rate.

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1. Profitability

1.1 Basic Checks

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

1.2 Ratios

Looking at the Return On Assets, with a value of 2.76%, SYP is in line with its industry, outperforming 47.37% of the companies in the same industry.
SYP has a Return On Equity (4.70%) which is in line with its industry peers.
The Return On Invested Capital of SYP (1.45%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years 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

The Profit Margin of SYP (18.89%) is better than 73.68% of its industry peers.
SYP's Profit Margin has been stable in the last couple of years.
SYP has a Operating Margin of 12.97%. This is in the better half of the industry: SYP outperforms 63.16% of its industry peers.
SYP's Operating Margin has declined in the last couple of years.
The Gross Margin of SYP (76.98%) is better than 60.53% of its industry peers.
SYP'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

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SYP is destroying value.
The number of shares outstanding for SYP has been increased compared to 1 year ago.
Compared to 5 years ago, SYP has more shares outstanding
SYP has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.48 indicates that SYP is not in any danger for bankruptcy at the moment.
SYP has a Altman-Z score (3.48) which is comparable to the rest of the industry.
SYP has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.48, SYP is not doing good in the industry: 61.40% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	0.48
Debt/FCF	N/A
Altman-Z	3.48

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.
SYP has a Current ratio of 1.62. This is comparable to the rest of the industry: SYP outperforms 57.89% of its industry peers.
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

The earnings per share for SYP have decreased by -1.67% in the last year.
The Earnings Per Share has been growing by 18.54% on average over the past years. This is quite good.
Looking at the last year, SYP 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

SYP 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, SYP 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

The Price/Earnings ratio is 38.19, which means the current valuation is very expensive for SYP.
Compared to the rest of the industry, the Price/Earnings ratio of SYP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.21. SYP is valued slightly more expensive when compared to this.
The Price/Forward Earnings ratio is 33.87, which means the current valuation is very expensive for SYP.
The rest of the industry has a similar Price/Forward Earnings ratio as SYP.
The average S&P500 Price/Forward Earnings ratio is at 25.98. SYP is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	38.19
Fwd PE	33.87

4.2 Price Multiples

SYP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. SYP is more expensive than 64.04% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	68.09

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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.