Synopsys (SNPS) Gains As Market Dips: What You Should Know

In the latest close session, Synopsys (SNPS) was up +2.37% at $421.50. The stock exceeded the S&P 500, which registered a loss of 0.17% for the day. At the same time, the Dow lost 0.2%, and the tech-heavy Nasdaq lost 0.28%.

Coming into today, shares of the maker of software used to test and develop chips had lost 1.27% in the past month. In that same time, the Computer and Technology sector gained 4.05%, while the S&P 500 gained 3.84%.

Analysts and investors alike will be keeping a close eye on the performance of Synopsys in its upcoming earnings disclosure. The company's earnings report is set to go public on August 26, 2026. The company is forecasted to report an EPS of $3.68, showcasing a 8.55% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.44 billion, up 40.31% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $14.75 per share and a revenue of $9.69 billion, demonstrating changes of +14.25% and +37.37%, respectively, from the preceding year.

Any recent changes to analyst estimates for Synopsys should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Synopsys is holding a Zacks Rank of #2 (Buy) right now.

From a valuation perspective, Synopsys is currently exchanging hands at a Forward P/E ratio of 27.91. Its industry sports an average Forward P/E of 18.89, so one might conclude that Synopsys is trading at a premium comparatively.

Also, we should mention that SNPS has a PEG ratio of 1.75. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Computer - Software stocks are, on average, holding a PEG ratio of 1.6 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 82, this industry ranks in the top 34% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNPS in the coming trading sessions, be sure to utilize Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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