Synopsys (SNPS) Registers a Bigger Fall Than the Market: Important Facts to Note
Synopsys (SNPS) closed the most recent trading day at $384.28, moving -7.85% from the previous trading session. This change lagged the S&P 500's daily loss of 1.01%. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 1.4%.
Shares of the maker of software used to test and develop chips witnessed a loss of 8.45% over the previous month, trailing the performance of the Computer and Technology sector with its loss of 3.73%, and the S&P 500's gain of 0.32%.
Analysts and investors alike will be keeping a close eye on the performance of Synopsys in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $3.68, marking a 8.55% rise compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue 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.
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. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational 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 past month, there's been no change in the Zacks Consensus EPS estimate. Synopsys is holding a Zacks Rank of #1 (Strong Buy) right now.
In the context of valuation, Synopsys is at present trading with a Forward P/E ratio of 28.27. This denotes a premium relative to the industry average Forward P/E of 15.9.
Investors should also note that SNPS has a PEG ratio of 1.77 right now. 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 industry had an average PEG ratio of 1.31 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 92, positioning it in the top 38% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).
