Synopsys (SNPS) Rises Higher Than Market: Key Facts

The latest trading session saw Synopsys (SNPS) ending at $549.61, denoting a +0.75% adjustment from its last day's close. The stock's performance was ahead of the S&P 500's daily gain of 0.13%. On the other hand, the Dow registered a gain of 0.08%, and the technology-centric Nasdaq decreased by 0.1%.

Coming into today, shares of the maker of software used to test and develop chips had lost 5.35% in the past month. In that same time, the Computer and Technology sector gained 0.89%, while the S&P 500 lost 0.35%.

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 May 22, 2024. The company is expected to report EPS of $3.01, up 18.5% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.52 billion, up 8.98% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $13.18 per share and a revenue of $6.49 billion, signifying shifts of +17.78% and +11.07%, respectively, from the last year.

It is also important to note the recent changes to analyst estimates for Synopsys. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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.

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. Synopsys is currently sporting a Zacks Rank of #4 (Sell).

In the context of valuation, Synopsys is at present trading with a Forward P/E ratio of 41.39. This represents a premium compared to its industry's average Forward P/E of 29.49.

Meanwhile, SNPS's PEG ratio is currently 2.36. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.36 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 66, this industry ranks in the top 27% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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