Reviewing Synopsys (SNPS) & Its Peers

Synopsys (NASDAQ:SNPS) is one of 959 public companies in the “Software” industry, but how does it contrast to its rivals? We will compare Synopsys to similar companies based on the strength of its analyst recommendations, earnings, profitability, institutional ownership, risk, valuation and dividends.

Profitability

This table compares Synopsys and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Synopsys	11.43%	6.24%	3.95%
Synopsys Competitors	-596.15%	26.13%	-8.98%

Volatility & Risk

Synopsys has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Synopsys’ rivals have a beta of 1.35, indicating that their average stock price is 35% more volatile than the S&P 500.

Earnings & Valuation

This table compares Synopsys and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Synopsys	$7.05 billion	$1.33 billion	80.42
Synopsys Competitors	$1.79 billion	$382.69 million	112.34

Synopsys has higher revenue and earnings than its rivals. Synopsys is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent ratings and price targets for Synopsys and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	0	3	22	1	2.92
Synopsys Competitors	5852	21632	45028	1503	2.57

Synopsys currently has a consensus price target of $575.00, suggesting a potential upside of 26.32%. As a group, “Software” companies have a potential upside of 28.42%. Given Synopsys’ rivals higher possible upside, analysts clearly believe Synopsys has less favorable growth aspects than its rivals.

Institutional & Insider Ownership

85.5% of Synopsys shares are owned by institutional investors. Comparatively, 41.5% of shares of all “Software” companies are owned by institutional investors. 0.6% of Synopsys shares are owned by company insiders. Comparatively, 19.9% of shares of all “Software” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Synopsys beats its rivals on 8 of the 13 factors compared.

About Synopsys

Synopsys, Inc. develops software, semiconductor intellectual property (IP) and services used to design and verify electronic systems. Its electronic design automation (EDA) tools help customers create, simulate, test and validate chips and other complex electronic products, while its IP portfolio provides reusable building blocks for semiconductor designs. The company also offers software security and quality tools that help developers identify vulnerabilities and assess applications throughout the software development process.