SYNOPSYS INC (SYP.DE) Stock Fundamental Analysis

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

432.65 EUR

-0.05 (-0.01%)

Last: 1/23/2026, 7:00:00 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. While SYP is still in line with the averages on profitability rating, there are concerns on its financial health. SYP is quite expensive at the moment. It does show a decent growth rate.

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1. Profitability

1.1 Basic Checks

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

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 of 4.70%. This is comparable to the rest of the industry: SYP outperforms 48.25% of its industry peers.
SYP's Return On Invested Capital of 1.45% is in line compared to the rest of the industry. SYP outperforms 48.25% of its industry peers.
SYP had an Average Return On Invested Capital over the past 3 years of 7.77%. This 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's Profit Margin of 18.89% is fine compared to the rest of the industry. SYP outperforms 73.68% of its industry peers.
SYP's Profit Margin has been stable in the last couple of years.
SYP has a better Operating Margin (12.97%) than 63.16% of its industry peers.
SYP's Operating Margin has declined in the last couple of years.
SYP has a Gross Margin of 76.98%. This is in the better half of the industry: SYP outperforms 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.
Compared to 1 year ago, SYP has more shares outstanding
Compared to 5 years ago, SYP has more shares outstanding
SYP has a worse debt/assets ratio than last year.

2.2 Solvency

SYP has an Altman-Z score of 3.48. This indicates that SYP is financially healthy and has little risk of bankruptcy at the moment.
SYP has a Altman-Z score (3.48) which is in line with its industry peers.
A Debt/Equity ratio of 0.48 indicates that SYP is not too dependend on debt financing.
SYP has a worse Debt to Equity ratio (0.48) than 61.40% of its industry peers.

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

ROIC/WACC0.13

WACC10.9%

2.3 Liquidity

SYP has a Current Ratio of 1.62. This is a normal value and indicates that SYP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.62, SYP is in line with its industry, outperforming 57.89% of the companies in the same industry.
SYP has a Quick Ratio of 1.52. This is a normal value and indicates that SYP is financially healthy and should not expect problems in meeting its short term obligations.
SYP's Quick ratio of 1.52 is in line compared to the rest of the industry. SYP outperforms 55.26% of its industry peers.

		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.
SYP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.54% yearly.
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

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

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 39.12.
SYP's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.21, SYP is valued a bit more expensive.
SYP is valuated quite expensively with a Price/Forward Earnings ratio of 34.69.
SYP's Price/Forward Earnings is on the same level as the industry average.
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	39.12
Fwd PE	34.69

4.2 Price Multiples

64.04% of the companies in the same industry are cheaper than SYP, based on the Enterprise Value to EBITDA ratio.

		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.
SYP has a very decent profitability rating, which may justify a higher PE ratio.
SYP's earnings are expected to grow with 16.34% in the coming years. This may justify a more expensive valuation.