SYNOPSYS INC (SYP.DE) Stock Fundamental Analysis

Europe • Frankfurt Stock Exchange • FRA:SYP • US8716071076

394.55 EUR

-9.1 (-2.25%)

Last: Jan 30, 2026, 07:00 PM

Fundamental Rating

Overall SYP gets a fundamental rating of 4 out of 10. We evaluated SYP against 115 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 valied quite expensively at the moment, while 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.
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's Return On Equity of 4.70% is in line compared to the rest of the industry. SYP outperforms 48.70% of its industry peers.
SYP has a Return On Invested Capital (1.45%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SYP is significantly below the industry average of 13.48%.
The 3 year average ROIC (7.77%) for SYP is well above the current ROIC(1.45%). The reason for the recent decline needs to be investigated.

		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 73.04% of its industry peers.
SYP's Profit Margin has been stable in the last couple of years.
The Operating Margin of SYP (12.97%) is better than 63.48% of its industry peers.
In the last couple of years the Operating Margin of SYP has declined.
SYP has a Gross Margin of 76.98%. This is in the better half of the industry: SYP outperforms 60.87% 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

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.
SYP has more shares outstanding than it did 5 years ago.
SYP has a worse debt/assets ratio than last year.

2.2 Solvency

SYP has an Altman-Z score of 3.27. This indicates that SYP is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 3.27, SYP perfoms like the industry average, outperforming 56.52% of the companies in the same industry.
A Debt/Equity ratio of 0.48 indicates that SYP is not too dependend on debt financing.
SYP's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. SYP is outperformed by 60.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.48
Debt/FCF	N/A
Altman-Z	3.27

ROIC/WACC0.13

WACC10.87%

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.
SYP has a Current ratio (1.62) which is comparable to the rest of the 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 of 1.52. This is comparable to the rest of the industry: SYP outperforms 54.78% 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

SYP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.67%.
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%.
Measured over the past years, SYP shows a quite strong growth in Revenue. The Revenue has been growing by 13.87% on average per year.

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

Based on estimates for the next years, SYP will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.48% on average per year.
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

Based on the Price/Earnings ratio of 36.20, the valuation of SYP can be described as expensive.
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 28.32. SYP is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 32.11, the valuation of SYP can be described as expensive.
SYP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 25.57. SYP is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	36.2
Fwd PE	32.11

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, SYP is valued a bit more expensive than the industry average as 63.48% of the companies are valued more cheaply.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	63.52

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.