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Synopsys, Inc. — Intrinsic Value & Fair Price

SNPS
NASDAQTechnologySoftware - InfrastructureCIK 0000883241synopsys.comAbout SNPS
Last close · Oct 16, 2026454.63−13.48 (−2.88%)
Market cap$87.1B
Model value · DCF · Perpetuity growth · 5y
112.09
Synopsys closed at $454.63 — overvalued by 306% vs model.
52.19the model's range339.37

DCF · Perpetuity growth · 5y leads for a software company — positive operating income and three years of positive free cash flow. From a five-year discounted cash flow.

Other models
146.54 – 492.09
Wall St. target
570.00 20% below
Above model, 1y
22 of 22 days

Price and model value

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What the marks mean
Daily close

Valuation models

price $454.63 · as of Oct 17, 2026

DCF · Perpetuity growth · 5y leads for a software company — positive operating income and three years of positive free cash flow. How we value a stock walks through every input. The price is 306% above the model value: the models see only the filed business, and a company priced on businesses with no revenue line yet is better taken apart, as Tesla is.

engine pkg:0.1.0

Research on SNPS

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How it is valued

Valued asSoftware
Low/slowing growth (~10% recent)Moderate margins (19% net margin)Highly cyclical earnings
What growth the price implies: the reverse DCF

Key figures

FY2025 · chosen for software companies
Price / sales
10.3×
Revenue growth
15.1%
Gross margin
77.0%
FCF margin
19.1%
Rule of 40
34.3%
Operating margin
13.0%
Full financials

Analyst actions

third-party, quoted
10-12Needham · target620.00
10-01KeyBanc · target605.00
10-01Deutsche Bank · target640.00
09-25HSBC · “Buy” from “Hold”upgrade
Ratings, targets and estimates

The weekly

One email a week across every stock we cover: 13F filings, insider trades, earnings and new research. It covers the whole market, not just SNPS. No account.

About Synopsys

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. The latter provides a suite of solutions such as virtual prototyping, static and formal verification, simulation, emulation, and FPGA-based prototyping with integrated debugging tools. Synopsys also develops FPGA design products, which enable programming for specific functions. A significant part of its business involves intellectual property (IP) solutions. This encompasses IP for widely adopted communication standards like USB, PCI Express, DDR, Ethernet, SATA, MIPI, HDMI, and Bluetooth Low Energy. They also furnish analog IP, including data converters and audio codecs, alongside system-on-chip (SoC) infrastructure IP, specialized datapath and building block IP, and verification IP products. Furthermore, their offerings include mathematical and floating-point components, as well as Arm AMBA interconnect fabric and peripherals. Beyond core IP, Synopsys supplies logic libraries, embedded memories, and configurable processor cores, complemented by application-specific instruction-set processor tools for embedded applications. They also develop IP subsystems for audio, sensor, and data fusion functionalities, in addition to specialized security IP solutions. For advanced system design and analysis, Synopsys provides Platform Architect solutions for SoC architecture optimization, along with general virtual prototyping tools and HAPS FPGA-based prototyping systems. Their expertise extends to tools designed for optical systems and photonic devices. In addition to software and IP, the company delivers a range of services, including security testing, managed services, professional programs, and training. These services are designed to help customers identify and resolve security vulnerabilities and defects across the software development lifecycle. Manufacturing solutions are also part of their extensive offerings. Synopsys serves a diverse global client base, with applications across electronics, financial services, automotive, medicine, energy, and various industrial sectors. The company was founded in 1986 and is headquartered in Mountain View, California.

CEO
Sassine Ghazi
Headquarters
Sunnyvale, CA
Employees
28,000
IPO
1992-02-26
Full company profile

Model estimates for research reference only, not investment advice. Every model rests on assumptions that may not match what happens; the formulas are in how we value a stock.