SNPS
Synopsys, Inc.$414.00
Unclear
Target $377.78
Report: Mar 07, 2026Technology • Software - Infrastructure • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$414.00-8.7%
Rec: UnclearConviction: Medium
Entry Target
$290.60
(30% below current)
Fair Value
$377.78
(9% below current)
Stop Loss
$253.04
(39% below current)
Position Size
Starter
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$651.73
52 Week Low$365.74
Avg. 3 Month Volume2.20M
Efficiency
LTM Gross Margin75.1%
LTM EBITDA Margin37.1%
LTM EBIT Margin22.2%
LTM Operating Margin10.8%
LTM ROA2.6%
LTM ROE4.6%
LTM ROIC11.7%
LTM ROCE5.4%
Capital Structure
Market Cap (MM)$76.0B
Enterprise Value (MM)$84.6B
Shares Outstanding189.59M
Total Debt (MM)$10.87B
Cash & Equivalents (MM)$2.20B
LTM Net Debt (MM)$8.67B
LTM Net Debt/EBITDA2.9x
Growth
TTM Rev. Growth31.9%
Last 3-Yr Rev. CAGR15.7%
Last 3-Yr EBITDA CAGR28.7%
Last 3-Yr EPS CAGR2.1%
Valuation
Street Target Price$528.75
LTM EV/Revenue10.6x
LTM EV/Gross Profit14.1x
LTM EV/EBIT47.6x
LTM EV/EBITDA28.5x
LTM P/E69.0x
LTM EV/FCF36.0x
LTM P/FCF32.3x
LTM P/TB9.4x
LTM P/B2.5x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $414.0 versus fair value $377.78 (-8.7% expected return), and valuation confidence is stable. Debate: Bull case depends on Ansys Synergy Realization: Management's ability to deliver on the 400 million run-rate synergy target by Year 4 will be the primary driver of margin expansion. Bear case centers on Moat Erosion in China: Geopolitical restrictions could permanently impair the 16% of revenue derived from China, as domestic competitors emerge and US export controls tighten. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
AI infrastructure build-out drives record demand for specialized compute design; Ansys integration creates a unique silicon-to-systems moat; 11.3 billion backlog provides high revenue visibility.
Bear Case
China export restrictions permanently impair 16% of revenue; 4.2x net leverage limits financial flexibility; integration of Ansys multi-physics tools is more complex and costly than anticipated.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Ansys Synergy Realization: Management's ability to deliver on the 400 million run-rate synergy target by Year 4 will be the primary driver o...
Near-Term (0-6 months)Impact: Critical
Design IP Segment Recovery: A return to mid-teens growth in the IP business would validate the AI-driven demand narrative and resolve the pr...
Long-Term (18+ months)Impact: Moderate
Synopsys is at a critical juncture following the completion of the Ansys merger and the emergence of shareholder litigation, making the next...
Primary Risks
Concern: High
Moat Erosion in China: Geopolitical restrictions could permanently impair the 16% of revenue derived from China, as domestic competitors eme...
Concern: Medium
Integration Failure: The complexity of merging Ansys' physics simulation with Synopsys' EDA tools could lead to R&D delays and customer chur...
Concern: Medium
The stewardship verdict is cautious. While the board has taken proactive steps like appointing Peter Shimer to bolster financial oversight,...
Recent Activity
2026-02-26SEC Filing (8-K)
-5.16%Synopsys reported Q1 FY 2026 revenue of $2.409 billion with non-GAAP EPS of $3.77, reiterating full-year revenue guidance of $9.61 billion including $2.9 billion from Ansys.
2025-12-12Analyst Target
-5.09%Firm: Morgan Stanley Price Target: $550.00 Price When Posted: $462.05 Implied Upside: +19.0%
2025-11-04SEC Filing (8-K)
-6.59%Rick Mahoney to step down as Chief Revenue Officer effective immediately.
2025-10-10Press Release
-9.39%Synopsys Receives Final Regulatory Approval To Close Planned Divestitures Of Synopsys Optical Solutions Group And Ansys Powerartist
2025-09-18SEC Filing (8-K/A)
+12.86%Amendment to 8-K adding disclosure about Vijayaraghavan's board committee appointment.
Valuation Table
9.8/10Decision Grade