Synopsys Inc. (SNPS) Stock

Synopsys Inc. trades at a P/E ratio of 59.27, which is above the market average of approximately 20. This premium valuation suggests investors expect above-average growth or the company has competitive advantages justifying the higher multiple. Looking ahead, the forward P/E of 35.21 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 19.55 indicates a premium valuation even accounting for growth.

With a beta of 1.11, Synopsys Inc. is roughly as volatile as the market, moving in line with broad market trends. This moderate beta suggests the stock offers market-level returns without excessive volatility. The price-to-book ratio of 7.87 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Synopsys Inc. achieves a profit margin of 34.80%, meaning it retains $34.80 from every $100 in revenue after all expenses. This is an impressive margin, indicating strong pricing power and efficient cost management that allows the company to generate substantial profits. The operating margin of 23.50% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 15.50% and ROA at 4.67%, the company generates strong returns on invested capital.

Synopsys Inc.'s revenue grew by 10.30% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings increased by 18.10% year-over-year, outpacing revenue growth through improved margins. These growth metrics should be evaluated against SERVICES-PREPACKAGED SOFTWARE industry averages for proper context.

Synopsys Inc. has a market capitalization of $79.55B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 155.16M shares outstanding, the company's ownership is relatively concentrated. As a participant in the SERVICES-PREPACKAGED SOFTWARE industry, it competes with other firms in this sector.

Synopsys Inc.'s book value per share is $63.91, while the current stock price is $584.76, resulting in a price-to-book (P/B) ratio of 9.15. This high P/B ratio indicates significant intangible assets, strong brand value, or high growth expectations. Technology and consumer brand companies often trade at elevated P/B ratios due to intellectual property and competitive advantages not reflected on the balance sheet. As a common stock, this represents equity ownership with voting rights.

22 analysts cover SNPS with 86% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The strong bullish consensus may already be priced in. The consensus target of $585.63 implies 0.1% upside, but targets are often adjusted to follow price moves rather than predict them.

Current analyst recommendations:4 Strong Buy, 15 Buy, 3 Hold, 00The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

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