Synopsys, Inc. SNPS
Synopsys remains a hold into its fiscal Q3 2026 earnings report (August 26, 2026 after-market), as the post-Ansys integration story is still too mixed to justify the 92.8x PE — 105.8% above the peer median of 45.1x. FY2025 revenue grew 15.1% to $7.05B and FCF held at $1.35B, but operating margin compressed to 12.97% from 22.13%, diluted EPS fell 44.6% to $8.04, and total debt ballooned to $14.3B from $684M.
The stock at $410 trades below both its 50-day ($417.06) and 200-day ($446.06) moving averages, and insiders are net sellers with $76.4M in net dispositions over 24 months, though smart money has turned slightly positive at 0.12 as of the quarter ended 2026-06-30. AI-driven chip design demand is a genuine tailwind, but the valuation leaves no room for execution missteps on margin recovery or deleveraging.
What could go wrong
- Debt burden and margin compression. Total debt surged to $14.3B in FY2025 from $684M in FY2024, and operating margin collapsed to 12.97% from 22.13%; if integration synergies from Ansys fail to materialize, deleveraging and margin recovery could be delayed indefinitely.
- Extreme valuation. At 92.8x PE versus a peer median of 45.1x, any earnings miss or guidance cut could trigger a sharp de-rating, especially with the stock already below both its 50-day and 200-day moving averages.
- End-market weakness in industrial/auto and China. Recent news highlights weak industrial and automotive starts and China exposure as key risks to Q3 growth, which could offset AI-driven chip design demand.
- Insider selling pressure. Over the trailing 24 months insiders net sold $76.4M in value across 201 transactions with no cluster buys, suggesting limited insider conviction at current levels.
What would change my mind
Where this comes from: FMP annual fundamentals + derived_metrics, fiscal year ended 2025-10-31 · derived_metrics, FY2025 vs FY2024 · derived_metrics eps_growth_yoy, FY2025 · FMP annual fundamentals, FY2025 vs FY2024 total_debt. Orin's read on SNPS; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All SNPS filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $5.6B | 0.1% of fund |
| State Street | $4.0B | 0.1% of fund |
| Invesco | $2.7B | 0.2% of fund |
| Fmr | $2.7B | 0.1% of fund |
| Nvidia | $2.2B | 3.4% of fund |
| Geode Capital Management | $2.0B | 0.1% of fund |
120 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 223 Form 4 filings, net −$114.9M. Of the 50 on hand, 0 were open-market purchases and 6 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 71.7× | 54.6× | 53.3× |
| EV/EBITDA | 24.4× | 40.9× | — |
| P/S | 8.40× | 11.98× | — |
| P/B | 2.5× | 8.7× | — |
Its P/E sits above all 5 of the last 5 years (+1.82σ from its own mean).
22.4%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $1.3B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$557
$475 – $633 · +35% against today's price
- 27 buy or overweight
- 1 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| SNPSSynopsys, Inc. | $79B | 71.7× | 24.4× | 72.4% | 11.4% | 4% |
| ADSKAutodesk, Inc. | $46B | 28.0× | 19.7× | 91.2% | 21.1% | 53% |
| CDNSCadence Design Systems, Inc. | $85B | 61.1× | 39.5× | 88.5% | 23.6% | 23% |
| CRWVCoreWeave, Inc. Class A Common Stock | $47B | — | 36.3× | 67.4% | -25.4% | -45% |
| FTNTFortinet, Inc. | $131B | 62.5× | 44.5× | 80.4% | 28.2% | 188% |
| GLWCorning Incorporated | $133B | 69.9× | 35.9× | 36.3% | 11.2% | 16% |
| TELTE Connectivity Ltd. | $62B | 20.8× | 13.5× | 35.4% | 15.8% | 23% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 17.4% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $248 | $460.17 · −46% | 2026-06-10 |
| Levered DCF | $303 | $460.17 · −34% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.