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In the latest market close, Synopsys (SNPS) reached $459.36, with a +0.08% movement compared to the previous day. The stock fell short of the S&P 500, which registered a gain of 0.63% for the day. Meanwhile, the Dow gained 0.21%, and the Nasdaq, a tech-heavy index, added 1.52%.
Prior to today's trading, shares of the maker of software used to test and develop chips had gained 4.67% over the past month. This has outpaced the Computer and Technology sector's gain of 1.66% and the S&P 500's loss of 0.7% in that time.
Market participants will be closely following the financial results of Synopsys in its upcoming release. The company's upcoming EPS is projected at $3.39, signifying a 13% increase compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $1.6 billion, indicating a 10.1% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $14.88 per share and a revenue of $6.77 billion, demonstrating changes of +12.73% and +7.98%, respectively, from the preceding year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Synopsys. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. Synopsys is currently sporting a Zacks Rank of #3 (Hold).
With respect to valuation, Synopsys is currently being traded at a Forward P/E ratio of 30.86. For comparison, its industry has an average Forward P/E of 26.97, which means Synopsys is trading at a premium to the group.
Meanwhile, SNPS's PEG ratio is currently 2.34. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 2.27.