Synopsys (SNPS)
Information Technology · $89.5B market cap · SEC CIK 0000883241
ahead of 19% of the S&P 500 · #61 of 73 in Information Technology
Next reports on Dec 8, 2026, after the close, with analysts expecting $4.21 in earnings per share.
52-week range $362.55 to $539.48. 15% below its 52-week high and 27% above its low.
The case for SNPS
- Revenue up 46.3% on the year.
- Generated $1.3B of free cash flow in FY2025, 19% of revenue.
- Has compounded revenue at 13.9% a year over five years.
- Gross margin of 72% absorbs cost shocks.
The case against
- Expensive for its growth: 83.1× earnings, where 22% a year of growth would justify about 42×.
- Earnings per share down 55.6%.
- Long-term debt of $13.5B would take 9 years of operating cash flow to repay.
- Return on equity of only 4%.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 28 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 49 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 36 |
| Momentumhow the price has behaved lately | 67 |
| Stabilityhow violently it moves, what it owes and what it pays you | 39 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +46.3% |
|---|---|
| Over 5 years | +13.9% a year |
| FY2025 revenue | $7.1B (+15%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2025 free cash flow | $1.3B |
|---|---|
| Of revenue | 19% |
| Of profit | 101% |
Profit margins
Is profitability improving? No, slipping
| Gross margin | 72% |
|---|---|
| Operating margin | 19% |
| Net margin, FY24 → FY25 → now | 36.9% → 18.9% → 11.4% |
Debt vs. cash
Is the balance sheet healthy? Stretched
| Cash | $2.9B |
|---|---|
| Long-term debt | $13.5B |
| Net debt | $10.6B |
| Years to repay | 8.9 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 83.1× |
|---|---|
| Fair P/E for its growth | 42× |
| P/FCF | 66.3× |
| Forward P/E | 25.3× |
| EV / EBITDA | 40.0× |
At 83.1× earnings it trades well above the 42× that 22% a year of growth would justify. At 66.3× free cash flow it trades above that same mark.
The financials, five years deep
Pulled from Synopsys's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $7.1B | $6.1B | $5.3B | $5.1B | $4.2B |
| Change on the year | +15% | +15% | +5% | +21% | — |
| Free cash flow | |||||
| Free cash flow | $1.3B | $1.3B | $1.5B | $1.6B | $1.4B |
| Of revenue | 19% | 21% | 28% | 32% | 33% |
| Profit margins | |||||
| Gross margin | 77.0% | 79.7% | 80.6% | 73.2% | 79.5% |
| Operating margin | 13.0% | 22.1% | 23.9% | 22.6% | 17.5% |
| Net margin | 18.9% | 36.9% | 23.1% | 19.4% | 18.0% |
| Debt vs. cash | |||||
| Cash | $2.9B | $3.9B | $1.4B | $1.4B | $1.4B |
| Long-term debt | $13.5B | $15.6M | $18.1M | $20.8M | $25.1M |
| Net cash (debt) | −$10.6B | $3.9B | $1.4B | $1.4B | $1.4B |
What Synopsys says it does
Company and Segment Overview Synopsys, Inc. (Synopsys, we, our or us) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver trusted and comprehensive solutions spanning silicon design, silicon intellectual property (IP), simulation and analysis (S&A) as well as design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. We are a global leader in supplying the mission-critical EDA solutions that engineers use to design and test integrated circuits (ICs), also known as chips or silicon, and we are pioneering artificial intelligence (AI) driven chip design across the full-stack EDA suite to improve efficiency and accelerate the design, verification testing and manufacturing of advanced digital and analog chips. We…