SNPS Synopsys Inc.
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Daily prices, adjusted for splits. P/E and P/S value each day on the results published by then; a gap in P/E means the trailing year had no profit.
Software - Infrastructure · Sunnyvale, CA · 28,000 employees · synopsys.com
Synopsys provides design automation software and intellectual property blocks used across the electronics and semiconductor sectors. It generates revenue by selling tools for integrated circuit design, verification, and testing, as well as pre-assembled silicon components. The company also offers manufacturing analytics and specialized processor solutions to chip developers.
Bull case
The business converts a portion of its revenue into free cash flow after accounting for stock compensation, with further tailwinds from selling software where automated AI agents conduct work. Top-line expansion has also accelerated, though this improvement includes the contribution of acquired businesses.
- Trades at the 20th percentile of its own valuation history.
- Turns 19% of revenue into free cash after stock pay.
- Annual revenue growth rose from +1% to +50%, including acquired businesses.
- The share price trend is rising.
Bear case
Returns on capital trail the cost of capital, indicating the absence of an economic moat. Gross margin has also fallen beneath its recent norm.
- The price assumes about +21% a year cash-flow growth, more than the +20% a year it delivered, including acquisitions.
- Returns on capital are below its cost of capital.
- Gross margin is 6.7 points below its recent norm.
Features
- V-NO-MOAT No moat Returns on capital are below its cost of capital.
- V-MARGIN-COMPRESSION Margin compression Gross margin is 6.7 points below its recent norm.
- V-ACCELERATING Growth accelerating Annual revenue growth rose from +1% to +50%, including acquired businesses. Shared by most companies we track
- T8 Lazarus Cheap against its own history, and the price trend has turned up.
AI impact
Sells AI to its customers Tailwind
The company sells semiconductor design software that integrates artificial intelligence to assist and automate engineering tasks. Its key advantage is embedding these capabilities directly into core engineering workflows, though it risks demand drops if broader artificial intelligence development slows or if competitors develop more effective tools.
Where AI helps it
- Its software sits where AI agents would do the work
Where AI could hurt it
- AI tools could do part of what it sells (minor)
- Depends on the AI build-out continuing (minor)
In the company's words
The solution is integrated with the Digital Design Family for design calibration and analytics and includes Yield Explorer ® for product ramp analytics, Silicon.da for AI-driven test and production analytics, TestMAX ALE (adaptive learning engine) for intelligent data extraction and communication…
The adoption of AI technologies have brought new demands and also challenges in terms of disruption to both our business models and existing technology offerings.
Assessed by AI from the company's own annual report filed 22 Dec 2025 and quarterly report filed 26 Aug 2026. A reading of the business, not a forecast or a recommendation.
Valuation position
SNPS is at the 20th percentile of its own valuation history. Depending on how far back you look, it ranges from the 19th to the 55th percentile. This is a relative measurement, not a price target or recommendation, and it assumes the business is still the one its history describes.
Price ladder
The measured price sits in the Reference zone. These are reference zones, not buy instructions or forecasts that the prices will be reached.
What the price assumes
The measured price implies roughly +20.7% annual cash-flow growth, between +13.2% and +26.3% under other reasonable assumptions. Over the last three years it delivered +19.5% a year.
An estimate that depends on its assumptions, not a forecast.
Quality versus peers
Each dimension is shown on its own; they are not combined into a score.
Current analyst snapshot
Shown for reference only; not used in any measurement.
What would have to break
- Not triggered — Revenue decline
- Not triggered — Margin break
- Not triggered — Cash burn with rising debt
- Not triggered — Heavy dilution
- Not triggered — Warning language in filings
News
1 brief featuring SNPS, newest first.
