Synopsys Inc (SNPS) stock analysis
Synopsys Inc (SNPS) clears 3 of this site's 8 mechanical value filters, 4 of 8 Buffett-style checks and 1 of 5 Lynch-style checks. At $422.48 it trades 78.5% above this site's neutral DCF value (a margin of safety of -78.5%). Its earnings quality rates Weak and it returns −1.1% to shareholders net of dilution. Figures are as of October 23, 2026, from SEC filings and market data refreshed weekly; this is educational analysis, not investment advice.
Data as of October 23, 2026. Refreshed weekly from SEC filings and market data.
What does Synopsys do?
Synopsys sells the software engineers use to design computer chips and verify them before manufacturing, plus pre-designed chip building blocks. It bought Ansys in 2025 to extend into engineering simulation.
Brands and businesses it owns
- Ansys
What stands out about Synopsys?
- The share price implies 22.8% yearly growth. At $422.48, SNPS's free cash flow of $13.86 per share would have to grow 22.8% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
- Misses 3 of the 8 value filters. It fails Trailing P/E < 25 (77.78), PEG Ratio < 1.5 (3.83) and Price/Sales < 7 (8.89); the other 3 pass and 2 were not evaluated. See every filter.
- The margin of safety is rising. It went from -101% on Oct 7 to -78% on Oct 23 across 5 weekly readings. See the trend.
- Earnings quality: Weak · 2 flags, 1 watch. Beneish M-score −1.79 (grey zone), mostly from receivables growing faster than sales · accruals −0.6% of assets · 96% of profit arrived as cash · stock comp 12.7% of revenue · share count +3.3% a year. From the latest 10-K (year to Oct 2025). See the Earnings Quality Screener.
- Owners are being diluted. Its net shareholder yield is −1.1%: more stock is issued than is bought back or paid out. See Shareholder Yield Leaders.
How has Synopsys' share price moved?
The interactive price chart needs JavaScript.
Is Synopsys undervalued? The value diligence check
Every value-investing signal this site computes for this stock, gathered in one place: the same real numbers from the tools below, not a new score.
- Margin of safety (DCF) -78.5%
- P/E vs. its own history 77.8x · at/above its priciest point Real range: 35.4x–69.1x over 5 years (net income per diluted share from each fiscal year's 10-K, paired with the real closing price at that fiscal year-end).
- Wall St. analyst rating Buy · 4.20/5 30 analysts this month: 9 strong buy, 18 buy, 3 hold, 0 sell, 0 strong sell (Finnhub). Up from 4.09 last month.
- Altman Z″-Score (bankruptcy risk) 2.63 · Safe zone
- Earnings quality (is the profit real?) Weak · 2 flags, 1 watch Beneish M-score −1.79 (grey zone), mostly from receivables growing faster than sales · accruals −0.6% of assets · 96% of profit arrived as cash · stock comp 12.7% of revenue · share count +3.3% a year. From the latest 10-K (year to Oct 2025) - see the Earnings Quality Screener for how each check is scored.
- Shareholder yield (cash back to owners) −1.1% net Latest fiscal year (2025): dividends 0.0% + buybacks 0.0% − stock comp 1.1%, as a share of today's market cap. Stock comp outruns what comes back in cash. Over 14 years its split-adjusted share count rose 10%. See Shareholder Yield Leaders.
- Capital needed to grow (See's test) $15.74 per $1 of new profit · Capital-hungry · but only 8% return on capital Operating profit $342M → $1.2B, capital needed $2.4B → $16B, 2016–2025 (3-year averages); return on capital now 8% before tax. Buffett's See's Candies needed $0.42 per $1 of new profit, FlightSafety $3.20, a typical grower about $5. See Capital-Light Compounders.
- PEG (growth at a reasonable price) 3.83 · Well above fair P/E 77.8× ÷ 20.3% a year of growth behind it. 383rd lowest of 447 stocks with a usable PEG. Lynch's fair value is a PEG of 1; a very high PEG usually means almost no growth, a very low one a profit spike. See PEG Ratio Ranking.
- Compounder lenses (4) 0 of 4 · misses capital-light, real profit, cash back, price Capital-light growth: not cleared (only 8% return on capital); Profit is real: not cleared (2 earnings-quality flags); Cash to owners: not cleared (−0.4% a year net); Fair price (PEG): not cleared (PEG 3.83, over 1.5). See Compounders at a Fair Price, which also lets you move the PEG bar.
- Value trap check Clear
- Munger's Inversion Check 2 flags
- Standing vs. sector peers 2 of 6 measures above the median Compared with the 43 other technology stocks this site tracks: 2 in the top third, 2 in the bottom third.
How does Synopsys compare with its peers?
2 of 6 measures sit above the median of the 43 other technology stocks tracked here, 2 in the top third and 2 in the bottom third.
- P/E ratiolower is cheaper · peer median 26.0× 77.8× ✕33rd of 39
- Free-cash-flow yieldhigher is cheaper · peer median 3.8% 3.3% –24th of 44
- Return on equityhigher is better · peer median 24% 4% ✕37th of 44
- Net marginhigher is better · peer median 16.9% 11.4% –27th of 44
- Revenue growthhigher is better, year on year · peer median 19.1% 46.3% ✓6th of 44
- Debt / equitylower is safer · peer median 0.60 0.32 ✓15th of 44
Peers are the stocks this site tracks in the same sector group, not every listed competitor. The bar runs from the weakest peer (left) to the strongest (right); the tick is the middle. Measures that don't apply to a sector (cash-flow yield for banks, debt for financials) are left out.
What would Buffett & Lynch say?
Buffett's checklist is built around durable, profitable businesses bought at sensible prices, and SNPS doesn't clear enough of it yet. In its favor: SNPS and has kept that profitability up over five years, not just this year, carries a conservative amount of debt relative to equity, has grown earnings per share at a solid clip over five years, and earns many times its interest expense, so debt service isn't a worry. Where it comes up short: SNPS isn't clearing the return-on-equity bar he'd want to see right now, runs thinner pretax margins than he'd like to see, is trading above what a conservative discounted-cash-flow estimate says it's worth right now, and trades rich relative to owner earnings, the real cash the business could pay out.
- ROE (TTM) > 11% ✕
- ROE (5yr avg) > 11% ✓
- Debt/Equity < 0.5 ✓
- Pretax margin > 15% ✕
- EPS growth (5yr) > 7% ✓
- Interest coverage > 5x ✓
- Trading below intrinsic value (DCF) ✕
- Price vs. owner earnings < 25x ✕
Lynch looked for growth stories that weren't overpriced for that growth, and SNPS falls short of his bar. In its favor: SNPS isn't over-leveraged for a company of its type. Where it comes up short: SNPS doesn't pay much of a dividend, which is the main reason to own a slow grower in the first place, isn't even growing at the modest pace he'd expect from a slow grower, is priced too rich for how little growth is actually left in the business, and trades expensive relative to the cash it actually generates.
- Dividend yield > 2.5% ✕
- EPS growth 0%-10% ✕
- Debt/Equity < 0.6 ✓
- P/E < 20 ✕
- Price/FCF < 25 ✕
Quantitative approximations of each investor's documented approach, not endorsed by either investor or their estates - commentary, not this site's actual ranking criteria. Buffett never published a numeric checklist: only 2 of his 8 checks here trace to his own documented concepts ("owner earnings," from his 1986 shareholder letter, and "price is what you pay, value is what you get," his case against fixed P/E/P/B ceilings) - the other 6 (ROE, debt, margins, growth, interest coverage) use commonly-cited thresholds that are not numbers he himself published. The 8 hard filters below (plus the Munger check and Graham margin of safety) are this site's real, mechanical screen and are computed completely independently of the checklists above.
Berkshire Hathaway's own filing
Which of the 8 value filters does Synopsys pass?
- Market Cap > $25B $83.7B
- Trailing P/E < 25 77.78
- PEG Ratio < 1.5 3.83
- Price/Book < 8 2.69
- Price/Sales < 7 8.89
- EPS Growth YoY > -5% +89.2%
- vs 50-day MA (±12%) Not evaluated †
- vs 200-day MA (±12%) Not evaluated †
What is Synopsys' margin of safety?
-101% on 2026-10-07 → -78% on 2026-10-23 (5 weekly readings).
Where is Synopsys in its 52-week range?
What is the short interest in Synopsys?
4,973,135 shares short as of 2026-09-30 (FINRA settlement date). Reported twice a month, so this only changes roughly every two weeks, not daily.
What could go wrong with Synopsys? Munger's inversion check
"Invert, always invert." Instead of reasons to buy, these are reasons to hesitate, not a verdict, and not everything worth knowing about a business.
- Margin of safety, even in the bull case -5%
- Short interest under 5% of float 2.7%
- Passes most of the 6 fundamental filters 3/6 passed
- Price run-up backed by value, not just momentum +16% off 52wk low
- Debt/equity stable since 2016 0.06 → 0.48
Doesn't cover circle of competence, management quality, or accounting concerns: those need judgment, not data.
How much have Synopsys shareholders gained per year?
Earnings growth per share plus dividend.
An earnings-based proxy, not a stock-price total return - it doesn't capture multiple expansion/contraction or reinvested dividends. EPS from SNPS's own 10-K filings; dividend yield is the current trailing yield on today's price, from the same weekly fetch as the rest of this site.
What do Synopsys' 10-year financials show?
From SNPS's own 10-K filings (SEC EDGAR): up to the last 10 fiscal years. Press any year's bars for the exact figures.
Frequently asked questions about Synopsys
What kind of company is Synopsys?
Synopsys sells the software engineers use to design computer chips and verify them before manufacturing, plus pre-designed chip building blocks. It bought Ansys in 2025 to extend into engineering simulation. Brands and businesses it owns include Ansys. This site groups it with Technology stocks.
Is Synopsys trading above or below its DCF value?
At $422.48, SNPS trades 78.5% above this site's neutral DCF value of $236.73 per share, a margin of safety of −78.5%. That DCF projects free cash flow for 10 years, with growth starting at 8% and fading to 2.5%, discounted at 10%; it is one set of assumptions, not a forecast. Test your own in the Intrinsic Value Calculator.
How many of this site's 8 value filters does Synopsys pass?
SNPS passes 3 of 8. It passes Market Cap > $25B ($83.7B), Price/Book < 8 (2.69) and EPS Growth YoY > -5% (+89.2%). It misses Trailing P/E < 25 (77.78), PEG Ratio < 1.5 (3.83) and Price/Sales < 7 (8.89). vs 50-day MA (±12%) and vs 200-day MA (±12%) were not evaluated, because the moving-average checks only run on stocks that clear the fundamentals first. The 8-filter list shows every stock that passes all of them.
What growth is Synopsys' share price pricing in?
At $422.48, SNPS's free cash flow of $13.86 per share would have to grow 22.8% a year, fading to 2.5% by year 10, for this site's DCF (10% discount rate) to match the price. This site's baseline starts at 8%, so the price asks for more growth than the baseline. Change the assumptions.
Are Synopsys's reported earnings reliable?
This site's earnings-quality check rates SNPS Weak · 2 flags, 1 watch. Beneish M-score −1.79 (grey zone), mostly from receivables growing faster than sales · accruals −0.6% of assets · 96% of profit arrived as cash · stock comp 12.7% of revenue · share count +3.3% a year. From the latest 10-K (year to Oct 2025). Concerns: the Beneish M-score (on watch), stock-based compensation (flagged) and share dilution (flagged). The five checks are the Beneish M-score (manipulation risk), accruals, cash conversion, stock-based compensation and share dilution; the Earnings Quality Screener shows how each is graded.
Is Synopsys's P/E ratio high or low compared with its own history?
SNPS trades at 77.8× trailing earnings. At the end of each of its last 5 fiscal years its P/E was between 35.4× and 69.1× (average 53.3×), so today's multiple is at or above the highest of those years. Each year's P/E pairs net income per diluted share from the 10-K with the closing price at that fiscal year-end.
Where do these numbers come from?
- Financial statements: Synopsys's 10-K annual report for the year ended Oct 31, 2025, filed Dec 22, 2025 (filing index). Every earlier year in the 10-year financials comes from the company's older 10-K filings, all listed on SEC EDGAR.
- Prices and market data: quotes, P/E and analyst ratings from Finnhub; daily price history and the 52-week range from Twelve Data, both refreshed weekly. Short interest comes from FINRA, reported twice a month.
- How to check a figure: click any number in the card above to see its exact source, and read the Editorial Standards for every rule behind the checks.
About this Synopsys Inc analysis
This page shows every value-investing check the site runs on Synopsys Inc (SNPS) in one place: the 8 mechanical filters, the Buffett and Lynch checklists, a margin of safety from a disclosed DCF, earnings quality, shareholder yield and how it ranks against its sector peers. The numbers come from SEC filings and public market data, refreshed weekly, and the same rules apply to every stock on the stock list. See Editorial Standards for the sources and the rules, or run your own filters in the stock screener.