Synopsys, Inc. (SNPS) is a publicly traded company in the Technology — Software - Infrastructure industry listed on NASDAQ. This overview shows the latest price, key valuation ratios, profitability metrics and financial-health indicators used by fundamental investors.
Synopsys, Inc. is a leading provider of electronic design automation (EDA) software, instrumental in the creation and validation of integrated circuits. The company offers a robust portfolio of platforms, including the Fusion Design Platform for digital implementation, and the comprehensive Verification Continuum Platform.
Is Synopsys, Inc. stock overvalued or undervalued in 2026?
Synopsys, Inc. (SNPS) trades at 81.8× earnings (P/E), above the median of the 314 technology companies over $2bn in Kaplio's universe. At the decade median (56.0×) $320 (-32 %); at its sector median (32.0×) $183 (-61 %).
Kaplio overview: Synopsys, Inc.
Market cap $90B · 52 weeks $368 – $535 (13 % below the high) · P/E 81.8× · 2027 expected P/E 24.9× · Dividend none · Next earnings December 9, 2026 · expected EPS $4.12 · Closing price, Oct 30 · accounts published Aug 26.
- Valuation: P/E 81.8× (expensive).
- Business: ROIC 2 % (weak).
- Balance sheet: Net debt/EBITDA 4.6× (fragile).
- Earnings: 7 of 8 (uneven).
What would it be worth at its usual multiples?
At the decade median (56.0×) $320 (-32 %); at its sector median (32.0×) $183 (-61 %). Implied price from applying the reference multiples to today's earnings (or book value, or FFO) per share. Not a fair value: it is where the stock would trade at its usual multiples.
Why is Synopsys, Inc.'s P/E so low?
Synopsys, Inc. trades at a P/E of 81.8× on reported earnings, but over the last 12 months 29 % of its pre-tax income ($381M) came from outside the business, such as revaluations or sales of stakes in other companies. It is real money, but it doesn't repeat every year. Without that part, its P/E would be about 116×. Kaplio's calculation from the official quarterly accounts filed up to the quarter ended July 31, 2026.
| Quarter ended | From the business | Outside the business | Net income |
|---|---|---|---|
| October 31, 2025 | $121M | $395M | $449M |
| January 31, 2026 | $203M | −$124M | $64.7M |
| April 30, 2026 | $236M | −$217M | $17.1M |
| July 31, 2026 | $357M | $326M | $546M |
What matters in technology: 2 of 8 pass
- 3y revenue growth 13.4 %, fails.
- ROIC 1.7 %, fails.
- SBC / Revenue 12.7 %, fails.
- Net debt / EBITDA 4.6×, fails.
- Rule of 40 (SaaS only) 33, borderline.
- FCF / Revenue 19.1 %, borderline.
- Gross margin 77.0 %, passes, near the threshold.
- EV/EBITDA vs own 5y 25.9×, passes.
Against its peers (reference peers) — Synopsys, Inc.: P/E 81.8×; EV/EBITDA 25.9×; ROIC 1.7 %; $89.6B. Cadence Design Systems, Inc. (P/E 65.2×; EV/EBITDA 38.8×; ROIC 12.8 %; $90.0B), Arm Holdings plc American Depositary Shares (P/E 212×; EV/EBITDA 176×; ROIC 7.3 %; $219B), Fortinet, Inc. (P/E 44.2×; EV/EBITDA 32.7×; ROIC 31.1 %; $99.8B).
Expensive or cheap against its last ten years?
P/E at each close: today 81.8× · median 56.0× · minimum 26.3× · maximum 86.4× · cheap below 43.6× · expensive above 68.1×. It has been cheaper than today 98% of the time over its last ten years.
Kaplio's reading: Synopsys, Inc.
Updated on October 26, 2026 · accounts published on August 26, 2026
Reading of October 23, 2026: Revenue keeps growing
Synopsys trades at a P/E of 75.2 over the last 12 months, 147 % above its sector median and higher than 93 % of the time over the past decade.
- Is Synopsys expensive or cheap? Its P/E of 75.2 is 147 % above the sector median of 30.5 and higher than in 93 % of the last decade.
- How is the business doing? Revenue grew 15 % over the last 12 months, but the 9.8 % operating margin trails the 16.3 % average of fiscal 2014-2025.
- How strong is the balance sheet? Net debt in fiscal 2025 equals 4.6× EBITDA, far above the 1.5× ceiling considered tolerable for software companies.
- Is Synopsys growing with real cash or by diluting shareholders? Stock-based pay took 12.7 % of revenue in fiscal 2025, above the 10 % healthy ceiling for tech, against 19.1 % free cash flow.
- What to expect from the next earnings? Analysts expect EPS of $4.12 when Synopsys reports on December 9, 2026, and 28 of 30 rate the stock a buy.
Is Synopsys expensive or cheap?
Over the last 12 months Synopsys trades at a P/E of 75.2. That is 34 % above its ten-year median of 56.0 and close to the decade high of 86.4. The stock has traded at a lower P/E 93 % of the time over the last decade. The median P/E for its sector is 30.5 across 359 companies, so Synopsys carries a 147 % premium. Much of that premium comes from shrinking earnings: EPS fell 45 % over the last 12 months, which pushes the multiple up. EV/EBITDA looks gentler at 24.0×, well below its five-year average of 40.4×. The shares are 20 % below their 52-week high of $534.56, down 6 % over the year, with a free cash flow yield of just 1.8 %.
How is the business doing?
Sales are growing: revenue rose 15 % over the last 12 months. Profit has not kept up. EPS fell 44.6 % over the same period, and the operating margin of 9.8 % is below both the 13.0 % of fiscal 2025 and the 16.3 % average of fiscal years 2014-2025. Returns on capital tell the same story. ROIC is 1.7 % over the last 12 months, 6.4 points below the sector median of 8.2 %, and ROE stands at 3.6 %. Synopsys kept ROIC above 10 % in 6 of the last 10 fiscal years, and its worst year was 2025 at 2.0 %, so the weakness sits in the latest figures and breaks with a better track record.
How strong is the balance sheet?
A debt-to-equity ratio of 0.35 over the last 12 months makes leverage look modest, but measured against earnings it is heavy. Net debt in fiscal 2025 was $73.54 per share ($92.03 of debt minus $18.49 of cash), about 17 % of the current share price, and 4.6× EBITDA, against a tolerable ceiling of 1.5× for software. A current ratio of 1.34 covers short-term obligations. The quality scores are soft. Over the last 12 months the Altman Z of 2.8 sits in the grey zone and the Piotroski score is 3 out of 9, which signals weakening fundamentals rather than acute distress.
Is Synopsys growing with real cash or by diluting shareholders?
In technology, generic ratios miss what matters most: growth, pricing power and dilution from stock-based pay. Pricing power holds up: the gross margin was 77 % in fiscal 2025, above the 70 % healthy mark for software. Growth falls just short. Revenue per share grew 13.4 % a year over fiscal 2022-2025, under the 15 % healthy line, and the Rule of 40 score is 33, two points below the healthy 35. Free cash flow reached 19.1 % of revenue in fiscal 2025, right at the 20 % threshold. The drag is stock-based pay at 12.7 % of revenue: above the 10 % healthy limit, though below the 20 % toxic level. Part of the cash the business generates is effectively paid for with new shares.
What to expect from the next earnings?
Synopsys reports its next results on December 9, 2026, and analysts expect EPS of $4.12 for the quarter. The track record is supportive: it beat EPS estimates in 7 of the last 8 quarters. The latest beat came on August 26, 2026, when it reported $3.91 against $3.67 expected, 6.5 % above the estimate. Expectations are steady. The 2026 EPS consensus barely moved over the last 30 days, from $15.14 to $15.16 across 14 analysts, and the revenue consensus is also flat. Of 30 analysts, 28 recommend buying, 2 recommend holding and none recommend selling, and that optimism comes alongside a P/E of 75.2.
How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.
Investor methods verdict
Would Buffett approve Synopsys today?
The Buffett Method would not approve Synopsys today: it fails its quality rules. Business quality: 73 out of 100 (price not included). Kaplio assessment with data from the week of 2026-10-26; not investment advice.
Would Peter Lynch approve Synopsys today?
The Lynch Method would wait for a better price for Synopsys: P/E 81.8 with 13% growth; it asks that the P/E not exceed growth. Business quality: 82 out of 100 (price not included). Lynch classifies it as a stalwart. Kaplio assessment with data from the week of 2026-10-26; not investment advice.
Profitability
| Return on Equity | 3.57% |
| Return on Invested Capital | 1.73% |
| Return on Assets | 2.26% |
| Gross Margin | 72.38% |
| Operating Margin | 9.75% |
| Net Margin | 11.43% |
Financial Health
| Debt / Equity | 0.35 |
| Current Ratio | 1.34 |
| Piotroski F-Score | 3 |
| Altman Z-Score | 2.76 |
Price Performance
| 1 month | -4.55% |
| 3 months | +19.27% |
| Year-to-date | -0.45% |
| 1 year | +3.04% |
| 3 years | -2.30% |
| 5 years | +40.34% |
| 10 years | +709.92% |
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Explore sector: Technology · Software - Infrastructure
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