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In the latest trading session, Synopsys (SNPS) closed at $480.54, marking a +1.48% move from the previous day. This change outpaced the S&P 500's 0.44% gain on the day. At the same time, the Dow added 0.7%, and the tech-heavy Nasdaq gained 0.27%.
The the stock of maker of software used to test and develop chips has risen by 24.1% in the past month, leading the Computer and Technology sector's gain of 15.87% and the S&P 500's gain of 10.62%.
The investment community will be closely monitoring the performance of Synopsys in its forthcoming earnings report. On that day, Synopsys is projected to report earnings of $3.39 per share, which would represent year-over-year growth of 13%. Meanwhile, our latest consensus estimate is calling for revenue of $1.6 billion, up 10.1% from the prior-year quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $14.88 per share and revenue of $6.77 billion, indicating changes of +12.73% and +7.98%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Synopsys. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% lower. Right now, Synopsys possesses a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Synopsys has a Forward P/E ratio of 31.83 right now. For comparison, its industry has an average Forward P/E of 26.45, which means Synopsys is trading at a premium to the group.
Meanwhile, SNPS's PEG ratio is currently 2.41. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Computer - Software industry stood at 2.28 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 73, placing it within the top 30% of over 250 industries.