Synopsys, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Synopsys remains a hold as post-Ansys revenue acceleration is genuine — Q3 FY2026 revenue of $2.48B grew 42.4% YoY with EPS of $3.91 beating estimates by 6.5%, the fourth consecutive positive surprise — but the stock's 30%+ monthly rally has stretched the PE to 78.9x, a 25% premium to the peer median of 63.1x.
FY2025 operating margin remains compressed at 13.0% versus 22.1% pre-acquisition, total debt stands at $14.3B, and insiders are net sellers at $98.4M over 24 months with the CEO selling at $462.84 on 15 Oct. The announced $1B accelerated buyback and consistent EPS beats support the recovery narrative, but at $454.63 the risk-reward is balanced rather than compelling until operating-margin recovery toward pre-deal levels is more fully realized.
What could go wrong
- Margin recovery stalls. FY2025 operating margin of 13.0% is well below the 22.1% level in FY2024; if integration costs persist, the premium valuation becomes harder to justify.
- Leverage overhang. Total debt jumped to $14.3B in FY2025 from $684M in FY2024, creating interest-cost and balance-sheet risk if revenue growth decelerates.
- Insider selling. Insiders are net sellers at $98.4M over 24 months; the CEO exercised options at $135.88 and sold shares at $462.84 on 15 Oct, signaling limited insider conviction at current prices.
- Valuation compression. PE of 78.9x is 25% above the peer median of 63.1x; a multiple de-rating could offset further earnings recovery.
What would change my mind
Where this comes from: Q3 FY26 results · earnings vs estimates, 26 Aug · peer comparison · FY24 and FY25 fundamentals. Orin's read on SNPS; not advice.
How has the share price moved?
Up 1.9% over twelve months, from $465.41 on 27 Oct 2025 to $474.42 at the Tue 27 Oct 2026 close. Its highest close in that time was $534.56 on 26 May 2026; the last close is 11.3% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 6.7M, on 1 Oct 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All SNPS filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $7.2B | 0.1% |
| Vanguard Capital Management | $5.6B | 0.1% |
| State Street | $4.0B | 0.1% |
| Invesco | $2.7B | 0.2% |
| FMR | $2.7B | 0.1% |
| Nvidia | $2.2B | 3.4% |
| Geode Capital Management | $2.0B | 0.1% |
| Vanguard Portfolio Management | $2.0B | 0.1% |
| Morgan Stanley | $1.7B | 0.1% |
| Goldman Sachs Group | $1.2B | 0.1% |
123 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 234 Form 4 filings; open-market trades net −$98.4M. Of the 50 on hand, 0 were open-market purchases and 10 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about SNPS
Orin answers questions about SNPS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 82.4× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 55.8×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 82.4×above usual | 55.8× | 46.1× |
| P/S | 9.66×below usual | 12.0× | — |
| EV/EBITDA | 26.3×below usual | 40.9× | — |
| P/B | 2.9×below usual | 8.7× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $576 (from $420 to $700) — 21% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$576
$420 – $700 · +21% against the last close
- 15 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 82.4× its last 12 months of profit. Only 2 of the 3 companies it is compared to made a profit (ARM 192×, CDNS 67.8×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| SNPSSynopsys, Inc. | $91B | 82.4× | 26.3× | 72.4% | 11.4% | 4% |
| AIPArteris, Inc. | $783M | lost money | n/m | 86.2% | −44.8% | n/m |
| ARMArm Holdings plc American Depositary Shares | $178B | 192× | 135× | 95.4% | 17.1% | 11% |
| CDNSCadence Design Systems, Inc. | $94B | 67.8× | 40.5× | 85.7% | 22.5% | 20% |
- AIP: lost money over the last 12 months, so no P/E.
- AIP: return on equity is not meaningful (n/m) — book value is below zero.
- AIP: EV/EBITDA is not meaningful (n/m) — its cash exceeds its market value plus debt, or the business lost money before depreciation.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 82.4× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now82.4×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $214 a share — 55% below the $473.93 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $214 | 55% below $473.93 |
| Levered | $263 | 45% below $473.93 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.