Synopsys Stock Intrinsic Value – Synopsys: High Quality EDA Company But Overvalued
January 7, 2024
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Synopsys ($NASDAQ:SNPS) is a company that specializes in Electronic Design Automation (EDA). They are a high-quality company and have made a significant mark in the industry.
However, currently, Synopsys’ stock is overvalued. This is likely due to the bullish market sentiment about the company and the technology sector as a whole. It is a global company that provides its services to industries such as automotive, consumer electronics, and semiconductors. It is also known for its software, tools, and IPs that help in the development of customized integrated circuits (ICs). Synopsys’ products have helped its customers achieve a great deal of success in their respective industries. It has also enabled them to reduce costs, improve performance, and develop new products. This has resulted in Synopsys being one of the top players in the EDA space. Despite its strong business and financial performance, Synopsys’ stock is currently overvalued. This could be attributed to the fact that investors have placed a higher value on technology stocks, which has pushed the stock beyond its true intrinsic value. This means that investors should proceed with caution when considering investing in Synopsys’ stock.
Market Price
Synopsys is a high quality electronic design automation (EDA) company that specializes in the development of software and hardware used in the design of integrated circuits and systems. However, their stock price may be slightly overvalued. On Friday, opening at $492.0, the stock closed at $484.8, down 1.1% from its prior closing price of $490.2. This suggests that investors may be slightly weary of Synopsys’s current stock price, particularly given the 1.1% decrease in value in a single day. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Synopsys. More…
| Total Revenues | Net Income | Net Margin |
| 5.84k | 1.23k | 22.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Synopsys. More…
| Operations | Investing | Financing |
| 1.7k | -482.1 | -1.2k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Synopsys. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 10.33k | 4.15k | 40.42 |
Key Ratios Snapshot
Some of the financial key ratios for Synopsys are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 16.6% | 27.1% | 23.0% |
| FCF Margin | ROE | ROA |
| 25.9% | 13.9% | 8.1% |
Analysis – Synopsys Stock Intrinsic Value
At GoodWhale, we have conducted an in-depth analysis of SYNOPSYS’s financials. Our proprietary Valuation Line has calculated that the fair value of SYNOPSYS share is around $411.7. However, the current market price of SYNOPSYS stock is $484.8, which means that it is overvalued by 17.8%. We advise investors to carefully assess the risk and potential return on their investments before making any decisions. Synopsys_High_Quality_EDA_Company_But_Overvalued”>More…
Peers
Its main competitors are Cadence Design Systems Inc, Goodpatch Inc, and Zuken Elmic Inc.
– Cadence Design Systems Inc ($NASDAQ:CDNS)
Cadence Design Systems is a software company that provides tools that help engineers design semiconductors and other electronic products. The company’s market cap is $43.36 billion, and its return on equity is 22.8%. Cadence’s products are used by engineers to design and verify the manufacturing of semiconductors, computer chips, and other electronic products.
– Goodpatch Inc ($TSE:7351)
Patch Inc is a technology company that provides software development and IT services. The company has a market cap of 5.5 billion as of 2022 and a return on equity of 8.49%. Patch Inc offers a wide range of services including web and mobile application development, cloud computing, big data, and artificial intelligence. The company has a strong focus on helping its clients grow their businesses and expand their reach. Patch Inc has a team of experienced and skilled professionals who are dedicated to providing the best possible services to their clients.
– Zuken Elmic Inc ($TSE:4770)
Zuken Elmic Inc. is a Japanese electronics company that specializes in electronic design automation (EDA) software. The company has a market capitalization of 2 billion as of 2022 and a return on equity of 13.95%. The company’s products are used by electronics manufacturers to design and test printed circuit boards (PCBs). Zuken Elmic’s products are used by some of the world’s largest electronics companies, such as Samsung, LG, and Sony.
Summary
Synopsys is a leading provider of Electronic Design Automation (EDA) software and services. The company has a strong track record of growth, driven by its innovative technology, extensive IP library and broad industry partnerships.
However, the stock is currently overvalued according to market capitalization, price-to-earnings and price-to-sales ratios. Investors should consider the company’s long-term growth potential, reputation for excellence, and commitment to product innovation before investing in the stock.
Additionally, investors should watch for developments in competitive pricing, customer trends, and macroeconomic factors that could affect the company’s long-term success.
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