Synopsys (SNPS) closed at $137.61 in the latest trading session, marking a +0.68% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.33%. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.33%.
Heading into today, shares of the maker of software used to test and develop chips had gained 0.51% over the past month, lagging the Computer and Technology sector's gain of 3.65% and the S&P 500's gain of 2.66% in that time.
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 $1.13 per share, which would represent year-over-year growth of 44.87%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $849.55 million, up 6.85% from the year-ago period.
SNPS's full-year Zacks Consensus Estimates are calling for earnings of $4.55 per share and revenue of $3.35 billion. These results would represent year-over-year changes of +16.37% and +7.44%, respectively.
Any recent changes to analyst estimates for SNPS should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SNPS is currently a Zacks Rank #3 (Hold).
In terms of valuation, SNPS is currently trading at a Forward P/E ratio of 30.04. This represents a premium compared to its industry's average Forward P/E of 28.68.
Meanwhile, SNPS's PEG ratio is currently 2.5. 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. The Computer - Software industry currently had an average PEG ratio of 2.18 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 71, putting it in the top 28% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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