Synopsys (SNPS)
Information Technology · $77.9B market cap · SEC CIK 0000883241
fundamentals score out of 100
Next reports on Dec 8, 2026, after the close, with analysts expecting $4.21 in earnings per share.
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
- Very expensive at 72.3× earnings. Years of growth are already in the price.
- Earnings per share down 55.6%.
- Long-term debt of $10.0B would take 7 years of operating cash flow to repay.
- Return on equity of only 4%.
- The price trend is weak (25/100): -18.9% over a year, -11.8% over three months, 26% of the way up its 52-week range.
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. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 36 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 48 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 36 |
| Momentumhow the price has behaved lately | 25 |
| Stabilityhow violently it moves, what it owes and what it pays you | 41 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
Key numbers
| Price / earnings | 72.3× |
|---|---|
| Price / book | 2.39× |
| Price / sales | 8.3× |
| Revenue growth (YoY) | +46.3% |
| EPS growth (YoY) | -55.6% |
| Gross margin | 72% |
| Operating margin | 19% |
| Net margin | 11% |
| Return on equity | 4% |
| Debt / equity | 0.32× |
| Current ratio | 1.34 |
| Dividend yield | none |
| Beta | 1.22 |
| 52-week range | $362.55 – $539.48 |
| Position in that range | 26% of the way up |
| 3-month return | -11.8% |
| 1-year return | -18.9% |
Five years of financials, as filed
Pulled from Synopsys's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $7.1B | $6.1B | $5.3B | $4.6B | $4.2B |
| Gross profit | $5.4B | $4.9B | $4.3B | $3.7B | $3.3B |
| Operating income | $915M | $1.4B | $1.3B | $1.1B | $735M |
| Net income | $1.3B | $2.3B | $1.2B | $985M | $758M |
| Operating cash flow | $1.5B | $1.4B | $1.7B | $1.7B | $1.5B |
| Capital expenditure | $169M | $140M | $190M | $137M | $93.8M |
| Total assets | $47.2B | $13.0B | $10.6B | $9.6B | $8.9B |
| Total liabilities | $16.7B | $3.7B | $3.9B | $3.9B | $3.5B |
| Shareholder equity | $30.5B | $9.3B | $6.7B | $5.6B | $5.4B |
| Cash | $2.1B | $3.7B | $1.1B | $1.2B | $1.1B |
| Long-term debt | $10.0B | $14.2M | $17.0M | $20.6M | $24.4M |
| Free cash flow | $1.3B | $1.3B | $1.5B | $1.6B | $1.4B |
| Gross margin | 77.0% | 79.7% | 80.6% | 80.5% | 79.5% |
| Operating margin | 13.0% | 22.1% | 23.9% | 24.9% | 17.5% |
| Net margin | 18.9% | 36.9% | 23.1% | 21.3% | 18.0% |
| Diluted shares | 166M | 156M | 155M | 156M | 157M |
Share count is up 5.3% over 4 years. Mild issuance.
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…
Risk factors SNPS lists in its 10-K
- Factors that May Affect Future Results
- Management's Discussion and Analysis of Financial Condition
- Quantitative and Qualitative Disclosures About Market Risk
- Uncertainty in the macroeconomic environment, and its potential impact on the semiconductor and electronics industries, may negatively affect our business, operating results and financial condition
- The growth of our business depends primarily on the semiconductor and electronics industries
- We operate in highly competitive industries, and if we do not continue to meet our customers’ demand for innovative technology at lower costs, our products may not be competitive or may become obsolete
- We are subject to governmental export and import requirements that could subject us to liability and restrict our ability to sell our products and services, which could impair our ability to compete in international markets
- Consolidation among our customers and within the industries in which we operate, as well as our dependence on a relatively small number of large customers, may negatively impact our operating results
- The global nature of our operations exposes us to increased risks and compliance obligations
- Our operating results may fluctuate in the future, which may adversely affect our stock price
- We may not realize the potential financial or strategic benefits of the transactions we complete, including the Ansys Merger, or find suitable target businesses and technology to acquire
- Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation
- If we fail to protect our proprietary technology, our business will be harmed
- We may not be successful in our AI initiatives, which could adversely affect our business, operating results or financial condition