In the latest close session, Synopsys (SNPS) was down 1.08% at $373.52. This change was narrower than the S&P 500's daily loss of 1.21%. Elsewhere, the Dow saw a downswing of 0.97%, while the tech-heavy Nasdaq depreciated by 2.15%.
The maker of software used to test and develop chips's shares have seen a decrease of 18.61% over the last month, not keeping up with the Computer and Technology sector's loss of 4.58% and the S&P 500's gain of 0.42%.
Investors will be eagerly watching for the performance of Synopsys in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 26, 2026. The company is expected to report EPS of $3.68, up 8.55% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.44 billion, up 40.31% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $14.75 per share and revenue of $9.69 billion. These totals would mark changes of +14.25% and +37.37%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Synopsys. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Synopsys presently features a Zacks Rank of #1 (Strong Buy).
Valuation is also important, so investors should note that Synopsys has a Forward P/E ratio of 25.6 right now. This valuation marks a premium compared to its industry average Forward P/E of 15.66.
It is also worth noting that SNPS currently has a PEG ratio of 1.6. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Software was holding an average PEG ratio of 1.23 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 95, positioning it in the top 39% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Synopsys, Inc. (SNPS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).