In the latest trading session, Synopsys (SNPS) closed at $132.76, marking a -1.93% move from the previous day. This change lagged the S&P 500's daily loss of 1.09%. Elsewhere, the Dow lost 1.23%, while the tech-heavy Nasdaq lost 1.19%.
Coming into today, shares of the maker of software used to test and develop chips had gained 1.43% in the past month. In that same time, the Computer and Technology sector gained 4.47%, while the S&P 500 gained 2.62%.
Wall Street will be looking for positivity from SNPS as it approaches its next earnings report date. On that day, SNPS is projected to report earnings of $1.09 per share, which would represent year-over-year growth of 14.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $829.52 million, up 6.39% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.36 per share and revenue of $3.33 billion. These totals would mark changes of +11.51% and +6.63%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for SNPS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SNPS is holding a Zacks Rank of #4 (Sell) right now.
Digging into valuation, SNPS currently has a Forward P/E ratio of 31.06. For comparison, its industry has an average Forward P/E of 30.99, which means SNPS is trading at a premium to the group.
It is also worth noting that SNPS currently has a PEG ratio of 2.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.1 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 61, putting it in the top 24% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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