Upside case
Bull case
$1183+134.6%
SNPS would need investors to value it at roughly 82x earnings — about 47x more generous than today's 35x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Synopsys, Inc. (SNPS) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
27
analysts
22 bullish · 0 bearish · 27 covering SNPS
Strong Buy
0
Buy
22
Hold
5
Sell
0
Strong Sell
0
Consensus Target
$544
+7.8% vs today
Scenario Range
$406 – $1183
Model bear to bull value window
Coverage
27
Published analyst ratings
Valuation Context
34.9x
Forward P/E · Market cap $96.6B
SNPS price targets
Three scenarios for where SNPS stock could go
Current
~$504
Confidence
83 / 100
Updated
May 1, 2026
Where we are now
Current · $504
Bear
$406
Base
$867
Bull
$1183
Market caseClosest to today
Base case
$867+71.8%
At 60x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$406-19.5%
If investor confidence fades or macro conditions deteriorate, a 7x multiple contraction could push SNPS down roughly 19% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Synopsys, Inc.
SNPS · NASDAQTechnologySoftware - InfrastructureOctober year-end
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.
Market Cap
$96.6B
Revenue TTM
$8.0B
Net Income TTM
$1.1B
Net Margin
13.8%
SNPS Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
92%Exceptional
12 quarters tracked
Revenue Beat Rate
83%Exceptional
vs consensus estimates
Avg EPS Surprise
+3.5%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 3 of 4Q2 2025
EPS
$3.67/$3.39
Revenue
$1.6B/$1.6B
Q3 2025
EPS
$3.39/$3.80
Revenue
$1.7B/$1.8B
Q4 2025
EPS
$2.90/$2.78
Revenue
$2.3B/$2.2B
Q1 2026
EPS
$3.77/$3.56
Revenue
$2.4B/$2.4B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $3.67/$3.39 | +8.3% | $1.6B/$1.6B | +0.2% |
| Q3 2025 | $3.39/$3.80 | -10.8% | $1.7B/$1.8B | -1.6% |
| Q4 2025 | $2.90/$2.78 | +4.3% | $2.3B/$2.2B | +0.3% |
| Q1 2026 | $3.77/$3.56 | +5.9% | $2.4B/$2.4B | +0.8% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$9.4B
+17.7% YoY
FY2
$10.6B
+12.5% YoY
EPS Outlook
FY1
$11.96
+75.6% YoY
FY2
$13.81
+15.5% YoY
Trailing FCF (TTM)$2.3B
FCF Margin: 28.5%
Next Earnings
May 27, 2026
Expected EPS
$3.17
Expected Revenue
$2.2B
SNPS beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
SNPS Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $7.1B
Product Mix
Latest annual revenue by segment or product family
License and Maintenance
49.5%
+8.2% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
43.9%
+13.2% YoY
Tap, hover, or focus a slice to inspect segment detail.
License and Maintenance is the largest disclosed segment at 49.5% of FY 2025 revenue, up 8.2% YoY.
UNITED STATES is the largest reported region at 43.9%, up 13.2% YoY.
SNPS Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Fairly Valued
Fair value est. $465 — implies -4.9% from today's price.
Premium to Fair Value
4.9%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
SNPS
62.7x
vs
S&P 500
25.2x
+149% premium
vs Technology Trailing P/E
SNPS
62.7x
vs
Technology
27.5x
+128% premium
vs SNPS 5Y Avg P/E
Today
62.7x
vs
5Y Average
53.4x
+18% premium
Forward PE
34.9x
S&P 500
19.1x
+83%
Technology
21.7x
+61%
5Y Avg
—
—
Trailing PE
62.7x
S&P 500
25.2x
+149%
Technology
27.5x
+128%
5Y Avg
53.4x
+18%
PEG Ratio
4.65x
S&P 500
1.75x
+166%
Technology
1.47x
+217%
5Y Avg
—
—
EV/EBITDA
68.5x
S&P 500
15.3x
+349%
Technology
17.4x
+295%
5Y Avg
47.1x
+45%
Price/FCF
71.6x
S&P 500
21.3x
+236%
Technology
19.8x
+262%
5Y Avg
46.2x
+55%
Price/Sales
13.7x
S&P 500
3.1x
+337%
Technology
2.4x
+467%
5Y Avg
11.9x
+15%
Dividend Yield
—
S&P 500
1.88%
—
Technology
1.18%
—
5Y Avg
—
—
| Metric | SNPS | S&P 500 | Technology | 5Y Avg SNPS |
|---|---|---|---|---|
| Forward PE | 34.9x | 19.1x+83% | 21.7x+61% | — |
| Trailing PE | 62.7x | 25.2x+149% | 27.5x+128% | 53.4x+18% |
| PEG Ratio | 4.65x | 1.75x+166% | 1.47x+217% | — |
| EV/EBITDA | 68.5x | 15.3x+349% | 17.4x+295% | 47.1x+45% |
| Price/FCF | 71.6x | 21.3x+236% | 19.8x+262% | 46.2x+55% |
| Price/Sales | 13.7x | 3.1x+337% | 2.4x+467% | 11.9x+15% |
| Dividend Yield | — | 1.88% | 1.18% | — |
SNPS trades above S&P 500 benchmarks on 6 of 6 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolSNPS Financial Health
Verdict
Adequate
SNPS generates $2.3B in free cash flow at a 28.5% margin.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$8.0B
Revenue Growth
TTM vs prior year
+31.9%
Gross Margin
Gross profit as a share of revenue
75.1%
Operating Margin
Operating income divided by revenue
10.8%
Net Margin
Net income divided by revenue
13.8%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$6.81
Free Cash Flow (TTM)
Cash generation after capex
$2.3B
FCF Margin
FCF as share of revenue — the primary cash quality signal
28.5%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
3.0%
ROA
Return on assets, trailing twelve months
2.3%
Cash & Equivalents
Liquid assets on the balance sheet
$2.9B
Net Debt
Total debt minus cash
$11.4B
Debt Serviceability
Net debt as a multiple of annual free cash flow
5.0× FCF
~5.0 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
3.6%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
162M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageSNPS Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Debt Load from Ansys Acquisition
The acquisition of Ansys added over $15 billion in debt, significantly raising Synopsys’s leverage. This debt load has compressed operating margins and increased financial risk, potentially limiting future capital flexibility.
High Risk
High Valuation Relative to Peers
Synopsys trades at markedly higher price‑to‑sales, price‑to‑free cash flow, and price‑to‑earnings multiples than its historical averages and industry peers, implying high growth expectations are already priced in. Such a premium may constrain upside if earnings growth stalls.
High Risk
Overvaluation Metrics
Analysts note a low free cash flow yield and an elevated enterprise value‑to‑EBITDA ratio, suggesting the stock may be overvalued. These metrics indicate that growth expectations are priced at a premium, increasing downside risk if performance falters.
Medium
Design IP Segment Decline
Synopsys’s Design IP segment has seen declining revenue and lower margins, with flat top‑line growth. Increased customization demands from AI customers have lengthened development cycles and strained resources, eroding profitability.
Medium
Customer Concentration Risk
A significant portion of Synopsys’s revenue comes from a single major foundry customer, creating concentration risk. Any loss or reduction in business from this customer could materially impact earnings.
Lower
Geopolitical & Export Risk
Export restrictions and geopolitical uncertainties, particularly involving China, pose risks to Synopsys’s Electronic Design Automation business. These constraints could limit market access and increase compliance costs.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why SNPS Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Indispensable Role in Chip Design
Synopsys supplies critical EDA tools and IP that enable the creation of increasingly complex semiconductors. As chip designs move toward 1‑nanometer nodes, the demand for sophisticated design tools grows exponentially, positioning Synopsys as a core enabler of next‑generation chips.
Strong Revenue Growth and Financial Performance
The company has delivered year‑over‑year revenue increases exceeding 65%. Forecasts project an annual revenue growth rate of around 24.8%, underscoring robust top‑line momentum.
Market Dominance and High Barriers to Entry
Decades of R&D, proven compatibility with customer products, and industry‑standard compliance cement Synopsys’s leading market position, creating significant barriers for competitors.
Recurring Revenue and Customer Retention
A shift to subscription‑based pricing has yielded a high customer retention rate of 95%, providing a stable and predictable revenue stream.
AI and Emerging Technologies
The AI boom and demand for advanced computing infrastructure drive the semiconductor industry, and Synopsys’s advanced tools and IP are essential for developing AI‑powered systems.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
SNPS Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$504.33
52W Range Position
47%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$376.18
+34.1% from the low
52-Week High
$651.73
-22.6% from the high
1 Month
+27.01%
3 Month
+18.14%
YTD
+5.0%
1 Year
+6.5%
3Y CAGR
+10.7%
5Y CAGR
+16.3%
10Y CAGR
+26.6%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
SNPS vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
34.9x
vs 44.7x median
-22% below peer median
Revenue Growth
+17.7%
vs +4.7% median
+281% above peer median
Net Margin
13.8%
vs 10.3% median
+33% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
SNP SNPS Synopsys, Inc. | $96.6B | 34.9x | +17.7% | 13.8% | Buy | +7.8% |
CDN CDNS Cadence Design Systems, Inc. | $98.0B | 44.7x | +15.0% | 20.9% | Buy | +4.5% |
COH COHU Cohu, Inc. | $2.3B | 93.2x | +0.8% | -11.5% | Buy | +0.3% |
ONT ONTO Onto Innovation Inc. | $14.6B | 41.6x | +7.7% | 10.3% | Buy | +4.9% |
FOR FORM FormFactor, Inc. | $11.6B | 68.5x | +4.7% | 8.1% | Hold | -17.3% |
PLA PLAB Photronics, Inc. | $3.0B | 23.1x | +1.0% | 15.8% | Buy | -5.3% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
FAQ
7 questionsSNPS Investor Questions
Common questions answered from live analyst data and company financials.
01Is Synopsys, Inc. (SNPS) stock a buy or sell in 2026?
Synopsys, Inc. (SNPS) is rated Buy by Wall Street analysts as of 2026. Of 27 analysts covering the stock, 22 rate it Buy or Strong Buy, 5 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $544, implying +7.8% from the current price of $504. The bear case scenario is $406 and the bull case is $1183.
02What is the SNPS stock price target for 2026?
The Wall Street consensus price target for SNPS is $544 based on 27 analyst estimates. The high-end target is $600 (+19.0% from today), and the low-end target is $455 (-9.8%). The base case model target is $867.
03Is Synopsys, Inc. (SNPS) stock overvalued in 2026?
SNPS trades at 34.9x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals fairly valued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Synopsys, Inc. (SNPS) stock in 2026?
The primary risks for SNPS in 2026 are: (1) Debt Load from Ansys Acquisition — The acquisition of Ansys added over $15 billion in debt, significantly raising Synopsys’s leverage. (2) High Valuation Relative to Peers — Synopsys trades at markedly higher price‑to‑sales, price‑to‑free cash flow, and price‑to‑earnings multiples than its historical averages and industry peers, implying high growth expectations are already priced in. (3) Overvaluation Metrics — Analysts note a low free cash flow yield and an elevated enterprise value‑to‑EBITDA ratio, suggesting the stock may be overvalued. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Synopsys, Inc.'s revenue and earnings forecast?
Analyst consensus estimates SNPS will report consensus revenue of $9.4B (+17.7% year-over-year) and EPS of $11.96 (+75.6% year-over-year) for the upcoming fiscal year. The following year, analysts project $10.6B in revenue.
06When does Synopsys, Inc. (SNPS) report its next earnings?
Synopsys, Inc. is expected to report its next earnings on approximately 2026-05-27. Consensus expects EPS of $3.17 and revenue of $2.2B. Over recent quarters, SNPS has beaten EPS estimates 92% of the time.
07How much free cash flow does Synopsys, Inc. generate?
Synopsys, Inc. (SNPS) generated $2.3B in free cash flow over the trailing twelve months — a free cash flow margin of 28.5%. SNPS returns capital to shareholders through and share repurchases ($0 TTM).