Comprehensive Stock Comparison
Compare Synopsys, Inc. (SNPS) vs Microsoft Corporation (MSFT) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | SNPS | 15.1% revenue growth vs MSFT's 14.9% |
| Value | MSFT | Lower P/E (23.8x vs 28.7x), PEG 1.27 vs 2.12 |
| Quality / Margins | MSFT | 39.0% net margin vs SNPS's 13.8% |
| Stability / Safety | MSFT | Beta 0.88 vs SNPS's 1.37, lower leverage |
| Dividends | MSFT | 0.8% yield; 19-year raise streak; SNPS pays no meaningful dividend |
| Momentum (1Y) | MSFT | -0.2% vs SNPS's -9.5% |
| Efficiency (ROA) | MSFT | 17.9% ROA vs SNPS's 2.3%, ROIC 27.9% vs 3.0% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Synopsys is a leading provider of electronic design automation software and semiconductor intellectual property used to design and test integrated circuits. The company generates revenue primarily from software license sales (~60% of revenue) and maintenance/services (~40%), with its IP segment—which includes interface, analog, and security IP—growing rapidly. Its competitive moat stems from deep technical expertise, long-standing customer relationships in the complex semiconductor design ecosystem, and high switching costs for its mission-critical tools.
Microsoft is a global technology company that develops software, cloud services, and hardware products. It generates revenue primarily through cloud services like Azure (~40% of revenue), productivity software including Office 365 and Dynamics, and personal computing through Windows licensing and Surface devices. Its key competitive advantage is the deeply entrenched enterprise ecosystem—Windows and Office dominance creates a powerful network effect that drives adoption of its cloud and productivity suites.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
MSFT leads in 4 of 6 categories — strongest in Valuation Metrics and Profitability & Efficiency. 1 category is tied.
Financial Metrics (TTM)
MSFT is the larger business by revenue, generating $305.5B annually — 38.1x SNPS's $8.0B. MSFT is the more profitable business, keeping 39.0% of every revenue dollar as net income compared to SNPS's 13.8%. On growth, SNPS holds the edge at +65.5% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | SNPSSynopsys, Inc. | MSFTMicrosoft Corpora… |
|---|---|---|
| RevenueTrailing 12 months | $8.0B | $305.5B |
| EBITDAEarnings before interest/tax | $1.7B | $184.8B |
| Net IncomeAfter-tax profit | $1.1B | $119.3B |
| Free Cash FlowCash after capex | $2.3B | $77.4B |
| Gross MarginGross profit ÷ Revenue | +75.1% | +68.6% |
| Operating MarginEBIT ÷ Revenue | +10.8% | +46.7% |
| Net MarginNet income ÷ Revenue | +13.8% | +39.0% |
| FCF MarginFCF ÷ Revenue | +28.5% | +25.3% |
| Rev. Growth (YoY)Latest quarter vs prior year | +65.5% | +16.7% |
| EPS Growth (YoY)Latest quarter vs prior year | -78.8% | +59.8% |
Valuation Metrics
At 28.8x trailing earnings, MSFT trades at a 44% valuation discount to SNPS's 51.5x P/E. Adjusting for growth (PEG ratio), MSFT offers better value at 1.53x vs SNPS's 3.82x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | SNPSSynopsys, Inc. | MSFTMicrosoft Corpora… |
|---|---|---|
| Market CapShares × price | $79.3B | $2.92T |
| Enterprise ValueMkt cap + debt − cash | $90.7B | $2.95T |
| Trailing P/EPrice ÷ TTM EPS | 51.49x | 28.79x |
| Forward P/EPrice ÷ next-FY EPS est. | 28.67x | 23.84x |
| PEG RatioP/E ÷ EPS growth rate | 3.82x | 1.53x |
| EV / EBITDAEnterprise value multiple | 57.55x | 18.12x |
| Price / SalesMarket cap ÷ Revenue | 11.24x | 10.36x |
| Price / BookPrice ÷ Book value/share | 2.36x | 8.54x |
| Price / FCFMarket cap ÷ FCF | 58.75x | 40.74x |
Profitability & Efficiency
MSFT delivers a 30.5% return on equity — every $100 of shareholder capital generates $31 in annual profit, vs $4 for SNPS. MSFT carries lower financial leverage with a 0.18x debt-to-equity ratio, signaling a more conservative balance sheet compared to SNPS's 0.50x. On the Piotroski fundamental quality scale (0–9), MSFT scores 6/9 vs SNPS's 3/9, reflecting solid financial health.
| Metric | SNPSSynopsys, Inc. | MSFTMicrosoft Corpora… |
|---|---|---|
| ROE (TTM)Return on equity | +3.6% | +30.5% |
| ROA (TTM)Return on assets | +2.3% | +17.9% |
| ROICReturn on invested capital | +3.0% | +27.9% |
| ROCEReturn on capital employed | +3.3% | +29.7% |
| Piotroski ScoreFundamental quality 0–9 | 3 | 6 |
| Debt / EquityFinancial leverage | 0.50x | 0.18x |
| Net DebtTotal debt minus cash | $11.4B | $30.3B |
| Cash & Equiv.Liquid assets | $2.9B | $30.2B |
| Total DebtShort + long-term debt | $14.3B | $60.6B |
| Interest CoverageEBIT ÷ Interest expense | 6.38x | 56.44x |
Total Returns (with DRIP)
A $10,000 investment in MSFT five years ago would be worth $17,186 today (with dividends reinvested), compared to $16,288 for SNPS. Over the past 12 months, MSFT leads with a -0.2% total return vs SNPS's -9.5%. The 3-year compound annual growth rate (CAGR) favors MSFT at 17.3% vs SNPS's 4.4% — a key indicator of consistent wealth creation.
| Metric | SNPSSynopsys, Inc. | MSFTMicrosoft Corpora… |
|---|---|---|
| YTD ReturnYear-to-date | -13.8% | -16.8% |
| 1-Year ReturnPast 12 months | -9.5% | -0.2% |
| 3-Year ReturnCumulative with dividends | +13.8% | +61.3% |
| 5-Year ReturnCumulative with dividends | +62.9% | +71.9% |
| 10-Year ReturnCumulative with dividends | +825.1% | +718.2% |
| CAGR (3Y)Annualised 3-year return | +4.4% | +17.3% |
Risk & Volatility
MSFT is the less volatile stock with a 0.88 beta — it tends to amplify market swings less than SNPS's 1.37 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. MSFT currently trades 70.7% from its 52-week high vs SNPS's 63.5% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | SNPSSynopsys, Inc. | MSFTMicrosoft Corpora… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.37x | 0.88x |
| 52-Week HighHighest price in past year | $651.73 | $555.45 |
| 52-Week LowLowest price in past year | $365.74 | $344.79 |
| % of 52W HighCurrent price vs 52-week peak | +63.5% | +70.7% |
| RSI (14)Momentum oscillator 0–100 | 42.9 | 39.8 |
| Avg Volume (50D)Average daily shares traded | 1.7M | 28.4M |
Analyst Outlook
Wall Street rates SNPS as "Buy" and MSFT as "Buy". Consensus price targets imply 48.6% upside for MSFT (target: $584) vs 27.9% for SNPS (target: $529). MSFT is the only dividend payer here at 0.82% yield — a key consideration for income-focused portfolios.
| Metric | SNPSSynopsys, Inc. | MSFTMicrosoft Corpora… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $529.44 | $583.67 |
| # AnalystsCovering analysts | 27 | 78 |
| Dividend YieldAnnual dividend ÷ price | — | +0.8% |
| Dividend StreakConsecutive years of raises | — | 19 |
| Dividend / ShareAnnual DPS | — | $3.23 |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | +0.6% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Synopsys, Inc. (SNPS) | 100 | 326.78 | +226.8% |
| Microsoft Corporati… (MSFT) | 100 | 278.33 | +178.3% |
Microsoft Corporati… (MSFT) returned +72% over 5 years vs Synopsys, Inc. (SNPS)'s +63%. A $10,000 investment in MSFT 5 years ago would be worth $17,186 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Synopsys, Inc. (SNPS) | $2.4B | $7.1B | +191.2% |
| Microsoft Corporati… (MSFT) | $91.2B | $281.7B | +209.1% |
Synopsys, Inc.'s revenue grew from $2.4B (2016) to $7.1B (2025) — a 12.6% CAGR. Microsoft Corporation's revenue grew from $91.2B (2016) to $281.7B (2025) — a 13.4% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Synopsys, Inc. (SNPS) | 11.0% | 18.9% | +71.5% |
| Microsoft Corporati… (MSFT) | 22.5% | 36.1% | +60.4% |
Synopsys, Inc.'s net margin went from 11% (2016) to 19% (2025). Microsoft Corporation's net margin went from 23% (2016) to 36% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Synopsys, Inc. (SNPS) | 96.9 | 58.4 | -39.7% |
| Microsoft Corporati… (MSFT) | 26.3 | 35.5 | +35.0% |
Synopsys, Inc. has traded in a 30x–97x P/E range over 9 years; current trailing P/E is ~51x. Microsoft Corporation has traded in a 25x–48x P/E range over 9 years; current trailing P/E is ~29x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Synopsys, Inc. (SNPS) | 1.73 | 8.04 | +364.7% |
| Microsoft Corporati… (MSFT) | 2.1 | 13.64 | +549.5% |
Synopsys, Inc.'s EPS grew from $1.73 (2016) to $8.04 (2025) — a 19% CAGR. Microsoft Corporation's EPS grew from $2.10 (2016) to $13.64 (2025) — a 23% CAGR.
Chart 6Free Cash Flow — 5 Years
Synopsys, Inc. generated $1B FCF in 2025 (-3% vs 2021). Microsoft Corporation generated $72B FCF in 2025 (+28% vs 2021).
SNPS vs MSFT: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is SNPS or MSFT a better buy right now?
Microsoft Corporation (MSFT) offers the better valuation at 28.8x trailing P/E (23.8x forward), making it the more compelling value choice. Analysts rate Synopsys, Inc. (SNPS) a "Buy" — based on 27 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — SNPS or MSFT?
On trailing P/E, Microsoft Corporation (MSFT) is the cheapest at 28.8x versus Synopsys, Inc. at 51.5x. On forward P/E, Microsoft Corporation is actually cheaper at 23.8x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Microsoft Corporation wins at 1.27x versus Synopsys, Inc.'s 2.12x — a reasonable growth-adjusted valuation.
03Which is the better long-term investment — SNPS or MSFT?
Over the past 5 years, Microsoft Corporation (MSFT) delivered a total return of +71.9%, compared to +62.9% for Synopsys, Inc. (SNPS). A $10,000 investment in MSFT five years ago would be worth approximately $17K today (assuming dividends reinvested). Over 10 years, the gap is even starker: SNPS returned +825.1% versus MSFT's +718.2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — SNPS or MSFT?
By beta (market sensitivity over 5 years), Microsoft Corporation (MSFT) is the lower-risk stock at 0.88β versus Synopsys, Inc.'s 1.37β — meaning SNPS is approximately 56% more volatile than MSFT relative to the S&P 500. On balance sheet safety, Microsoft Corporation (MSFT) carries a lower debt/equity ratio of 18% versus 50% for Synopsys, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — SNPS or MSFT?
Microsoft Corporation (MSFT) is the more profitable company, earning 36.1% net margin versus 18.9% for Synopsys, Inc. — meaning it keeps 36.1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: MSFT leads at 45.6% versus 13.0% for SNPS. At the gross margin level — before operating expenses — SNPS leads at 77.0%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is SNPS or MSFT more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Microsoft Corporation (MSFT) is the more undervalued stock at a PEG of 1.27x versus Synopsys, Inc.'s 2.12x. A PEG below 1.5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, Microsoft Corporation (MSFT) trades at 23.8x forward P/E versus 28.7x for Synopsys, Inc. — 4.8x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for MSFT: 48.6% to $583.67.
07Which pays a better dividend — SNPS or MSFT?
In this comparison, MSFT (0.8% yield) pays a dividend. SNPS does not pay a meaningful dividend and should not be held primarily for income.
08Is SNPS or MSFT better for a retirement portfolio?
For long-horizon retirement investors, Microsoft Corporation (MSFT) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.88), 0.8% yield, +718.2% 10Y return). Both have compounded well over 10 years (MSFT: +718.2%, SNPS: +825.1%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between SNPS and MSFT?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. MSFT pays a dividend while SNPS does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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