In the latest close session, Synopsys (SNPS) was down 1.22% at $559.28. The stock's change was less than the S&P 500's daily loss of 0.33%. Elsewhere, the Dow lost 0.63%, while the tech-heavy Nasdaq lost 0.22%.
Shares of the maker of software used to test and develop chips have appreciated by 14.38% over the course of the past month, outperforming the Computer and Technology sector's gain of 5.24%, and the S&P 500's gain of 4.07%.
The upcoming earnings release of Synopsys will be of great interest to investors. The company's earnings per share (EPS) are projected to be $3.84, reflecting a 11.95% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $1.77 billion, up 16% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.09 per share and revenue of $6.77 billion. These totals would mark changes of +14.32% and +8.08%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Synopsys. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Currently, Synopsys is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, Synopsys is currently trading at a Forward P/E ratio of 37.51. This expresses a premium compared to the average Forward P/E of 26.68 of its industry.
We can additionally observe that SNPS currently boasts a PEG ratio of 2.68. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Computer - Software industry stood at 2.36 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 39, finds itself in the top 16% echelons of all 250+ industries.
Story ContinuesThe 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Synopsys, Inc. (SNPS) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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