In the latest trading session, Synopsys (SNPS) closed at $324.82, marking a -0.33% move from the previous day. This move was narrower than the S&P 500's daily loss of 0.39%. Meanwhile, the Dow lost 0.14%, and the Nasdaq, a tech-heavy index, lost 0.1%.
Heading into today, shares of the maker of software used to test and develop chips had gained 9.91% over the past month, outpacing the Computer and Technology sector's gain of 5.83% and the S&P 500's gain of 6.77% in that time.
Wall Street will be looking for positivity from Synopsys as it approaches its next earnings report date. This is expected to be November 30, 2022. In that report, analysts expect Synopsys to post earnings of $1.84 per share. This would mark year-over-year growth of 1.1%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.28 billion, up 11.01% from the year-ago period.
It is also important to note the recent changes to analyst estimates for Synopsys. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. Synopsys is holding a Zacks Rank of #4 (Sell) right now.
Looking at its valuation, Synopsys is holding a Forward P/E ratio of 32.47. This valuation marks a premium compared to its industry's average Forward P/E of 25.69.
Also, we should mention that SNPS has a PEG ratio of 2.08. 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. SNPS's industry had an average PEG ratio of 2.13 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 147, which puts it in the bottom 42% 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.
To follow SNPS in the coming trading sessions, be sure to utilize Zacks.com.
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