Synopsys (SNPS) closed at $405.98 in the latest trading session, marking a +1.29% move from the prior day. The stock's performance was ahead of the S&P 500's daily loss of 0.18%. At the same time, the Dow lost 0.85%, and the tech-heavy Nasdaq lost 0.06%.
Shares of the maker of software used to test and develop chips witnessed a loss of 7.75% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 1.48%, and the S&P 500's gain of 3.33%.
The investment community will be closely monitoring the performance of Synopsys in its forthcoming earnings report. The company is scheduled to release its earnings on August 26, 2026. The company is expected to report EPS of $3.68, up 8.55% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $2.44 billion, indicating a 40.31% growth compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $14.75 per share and a revenue of $9.69 billion, representing changes of +14.25% and +37.37%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Synopsys. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. At present, Synopsys boasts a Zacks Rank of #2 (Buy).
With respect to valuation, Synopsys is currently being traded at a Forward P/E ratio of 27.17. This expresses a premium compared to the average Forward P/E of 17.12 of its industry.
One should further note that SNPS currently holds a PEG ratio of 1.7. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer - Software was holding an average PEG ratio of 1.57 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 84, this industry ranks in the top 35% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Synopsys, Inc. (SNPS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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