# Synopsys (SNPS.US)

Canonical: https://gigainvestors.com/s/SNPS

Analysis as of: 2026-10-16T07:32:01.276Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $468.11 per share; close as of 2026-10-15.

Estimated value: low $152.93 per share, central $178.87 per share, high $205.32 per share. Buy at or below the central value $178.87 per share. Valuation as of 2026-10-16T07:32:01.276Z; scenarios are not confidence intervals.

Expected annual return: 5.5% at the stated quote. About 5.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.27×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.12×

- FY2019: 0.15×

- FY2020: 0.17×

- FY2021: 0.17×

- FY2022: 0.25×

- FY2023: 0.24×

- FY2024: 0.22×

- FY2025: 0.13×

- LTM to Jul 2026: 0.10×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 63.3%

- ROIC, second-lowest year: 6.9%

- Typical minus recent gross margin: 1.0 pp

- Typical gross margin (annual median): 78.0%

- Recent gross margin (lower of latest and 3-year median): 77.0%

- Years with nonpositive capital: 2

- Capital spending / revenue: 3.0%

- ROIC including acquisitions, ten-year median: 16.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 6.6%

- FY2018: >100%

- FY2019: >100%

- FY2020: 63.9%

- FY2021: 85.7%

- FY2022: 67.6%

- FY2023: 62.6%

- FY2024: 58.2%

- FY2025: 6.9%

- LTM to Jul 2026: 6.6%

### economics: pass

- Owner earnings / net income, 5-yr: 1.14×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $7.5B

- Net income, five-year total: $6.6B

- Return on incremental invested capital: 15537.2%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 2.5 pp

- Working capital / revenue, final three-year average: 20.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.09×

- FY2023: 1.04×

- FY2024: 1.08×

- FY2025: 1.37×

- LTM to Apr 2026: 1.42×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 7.6% vs 58.2%

- Per-share earnings: 1.43 to 8.04 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.5%

- Ordinary dilution, 5-year annual growth: 1.2%

- Market cap gain: $75B

- Cumulative retained earnings: $8.4B

- Diluted shares, 10-year annual growth: 0.5%

- Diluted shares, 5-year annual growth: 1.2%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 24.1%

- Per-share value change: $6.61

- Per-share value, starting three-year median: $1.43

- Per-share value, ending three-year median: $8.04

- Buybacks concentrated in cheaper years (correlation): 0.27

- Average buyback yield: 2.1%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: $37B

- Cumulative net income, 10 years: $8.6B

- ROIC, first three-year median: 7.6%

- ROIC, last three-year median: 58.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.72

- FY2017: $0.88

- FY2018: $2.82

- FY2019: $3.45

- FY2020: $4.27

- FY2021: $4.81

- FY2022: $6.29

- FY2023: $7.92

- FY2024: $14.51

- FY2025: $8.04

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -0.4%

- Receivables to sales index (DSRI): 1.40×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 58.8%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.14×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.40×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -6.1%

- FY2017: -9.2%

- FY2018: 0.1%

- FY2019: -4.2%

- FY2020: -4.1%

- FY2021: -8.4%

- FY2022: -8.0%

- FY2023: -4.6%

- FY2024: 6.6%

- FY2025: -0.4%

## Holders

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Davis](https://gigainvestors.com/DAV): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Duan Yongping](https://gigainvestors.com/HH): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 26% since Jul 2025 · "Synopsys' Growth Outlook Softens as Core Business Slows, Morgan Stanley Says" (finance.yahoo.com, Feb 2026) · sales +15.1%

Story as of 2026-10-16T09:59:36.523Z; price observation 2026-10-15.

Price needs cash profits to grow 15.1% a year for ten years

- 2025-07-18: Synopsys (SNPS) Completes Acquisition Of Ansys, Expands Market Reach To US$31 Billion ([finance.yahoo.com](https://finance.yahoo.com/news/synopsys-snps-completes-acquisition-ansys-172136825.html))

- 2025-09-09: Synopsys reports soft earnings guidance as Q3 results miss amid China chip ban ([finance.yahoo.com](https://finance.yahoo.com/news/synopsys-reports-soft-earnings-guidance-211038495.html))

- 2025-12-10: Synopsys tops revenue estimates on strong demand for chip design tools ([finance.yahoo.com](https://finance.yahoo.com/news/synopsys-tops-revenue-estimates-strong-223349859.html))

- 2026-02-27: Synopsys' Growth Outlook Softens as Core Business Slows, Morgan Stanley Says ([finance.yahoo.com](https://finance.yahoo.com/news/synopsys-apos-growth-outlook-softens-160632547.html))

- 2026-08-28: Synopsys (SNPS) Earnings Beat And Higher Outlook Put Valuation Back In Focus ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/synopsys-snps-earnings-beat-higher-090803516.html))

- 2026-10-07: Synopsys (SNPS) Stock Fair Value Edges Higher After AI Deals And Investor Day ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/synopsys-snps-stock-fair-value-101426599.html))

### Sales · FY2024–2025

sales +15.1%; source https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm; observed 2025-12-22.

- FY2016: $2.4B 

- FY2017: $2.7B 

- FY2018: $3.1B 

- FY2019: $3.4B 

- FY2020: $3.7B 

- FY2021: $4.2B 

- FY2022: $4.6B 

- FY2023: $5.3B 

- FY2024: $6.1B 

- FY2025: $7.1B 

### Gross margin · FY2025

gross margin 77%; source https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm; observed 2025-12-22.

- FY2016: 77.6% 

- FY2017: 76.0% 

- FY2018: 76.4% 

- FY2019: 77.6% 

- FY2020: 78.4% 

- FY2021: 79.5% 

- FY2022: 80.5% 

- FY2023: 80.6% 

- FY2024: 79.7% 

- FY2025: 77.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software infrastructure; annual sales are USD 7.1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm (filed 2025-12-22); FY2025: revenue 7054178000; grossProfit 5430629000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SNPS.US: Synopsys, Inc. provides design IP solutions in the semiconductor and electronics industries. It operates in two segments, Design Automation and Design IP. The company offers Digital and Custom IC Design solution that provides digital design implementation solutions; Verification solution that offers virtual prototyping, static and formal verification, simulation, emulation, field programmable gate array (FPGA)-based prototyping, and debug solutions; FPGA design products that are programmed to perform specific functions; synopsys technology computer-aided design (TCAD), mask synthesis, and manufacturing analytic solutions; and AI-driven EDA solutions. It also provides pre-verified and silicon-proven IP solutions, logic libraries and embedded memories, processor and security solutions, IP Offerings for the automotive market, SOC infrastructure IP, data path and building block IP, and mathematical and floating-point components. Synopsys, Inc. has a strategic collaboration with Arm Holdings plc for development of AGI CPU that provides solutions across its full-stack design portfolio including EDA, interface IP, and hardware-assisted verification (HAV). It has a strategic partnership with OpenAI to revolutionize the design of semiconductors. Synopsys, Inc. has a strategic agreement with Amazon to accelerate Amazon's custom silicon innovation and advance the development of complex AI-powered products and cloud infrastructure. The company was incorporated in 1986 and is headquartered in Sunnyvale, California.

### Why customers stay

Margins ranged from 77% to 80.6% during 2023–25; it earns 63.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2023: grossProfit / revenue = 80.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2024: grossProfit / revenue = 79.7%.

- Source: https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm (filed 2025-12-22); FY2025: grossProfit / revenue = 77%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); 10-year return on capital observations [[2016,0.07558088634292484],[2017,0.06606488698847558],[2018,4.388064610437071],[2019,1.581898309315967],[2020,0.639236265729883],[2021,0.8567305342105836],[2022,0.675603451447413],[2023,0.6260597838851423],[2024,0.5820145709373123],[2025,0.06881641504882323]]; median 0.6326480248075126. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 81% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm (filed 2025-12-22); Gross margin observations: [[2021,0.7950196387273372],[2022,0.8054444014512164],[2023,0.8061601567803319]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 5 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2016: growth capex 0; upkeep 71040000; owner earnings 402818000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2017: growth capex 0; upkeep 73554000; owner earnings 252451000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2018: growth capex 0; upkeep 101926000; owner earnings 539799000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2019: growth capex 712000; upkeep 201676000; owner earnings 532366999. Growth capex / owner earnings = 0.0013374232462519714.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2020: growth capex 0; upkeep 158762000; owner earnings 715571000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2021: growth capex 0; upkeep 95740000; owner earnings 865452000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2022: growth capex 0; upkeep 139082000; owner earnings 1073917000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2023: growth capex 0; upkeep 191822000; owner earnings 1285186000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); FY2024: growth capex 0; upkeep 123161000; owner earnings 2435284000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm (filed 2025-12-22); FY2025: growth capex 0; upkeep 169454000; owner earnings 1823196000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); Dividend observations: [[2016,185000000],[2017,320000000],[2018,620635000],[2019,192897000],[2020,276489000],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SNPS.US SharesStats.PercentInsiders = 2.986 percentage points; cache date 2026-10-16.

### What could break it

"The growth of our business depends primarily on the semiconductor and electronics industries." (SEC filing, Dec 2025)

- Source: https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm (filed 2025-12-22); The growth of our business depends primarily on the semiconductor and electronics industries.

### What the price says

The price assumes cash profits grow 15.1% yearly over ten years; actual growth was 17.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-22); Ten-year compound average after fade. Initial solved rate 0.20475041171574937. Price 468.11; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 2.1959826653591876 → FY2025 11.005915873859081. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $59.31 per share

- 2016-11: $60.48 per share

- 2016-12: $58.86 per share

- 2017-01: $62.89 per share

- 2017-02: $71.44 per share

- 2017-03: $72.13 per share

- 2017-04: $73.70 per share

- 2017-05: $74.87 per share

- 2017-06: $72.93 per share

- 2017-07: $76.57 per share

- 2017-08: $80.42 per share

- 2017-09: $80.53 per share

- 2017-10: $86.52 per share

- 2017-11: $90.38 per share

- 2017-12: $85.24 per share

- 2018-01: $92.61 per share

- 2018-02: $84.67 per share

- 2018-03: $83.24 per share

- 2018-04: $85.51 per share

- 2018-05: $88.07 per share

- 2018-06: $85.57 per share

- 2018-07: $89.43 per share

- 2018-08: $102.14 per share

- 2018-09: $98.61 per share

- 2018-10: $89.53 per share

- 2018-11: $91.94 per share

- 2018-12: $84.24 per share

- 2019-01: $93.35 per share

- 2019-02: $101.68 per share

- 2019-03: $115.15 per share

- 2019-04: $121.08 per share

- 2019-05: $116.44 per share

- 2019-06: $128.69 per share

- 2019-07: $132.76 per share

- 2019-08: $141.81 per share

- 2019-09: $137.25 per share

- 2019-10: $135.75 per share

- 2019-11: $141.04 per share

- 2019-12: $139.20 per share

- 2020-01: $147.51 per share

- 2020-02: $137.93 per share

- 2020-03: $128.79 per share

- 2020-04: $157.12 per share

- 2020-05: $180.91 per share

- 2020-06: $195.00 per share

- 2020-07: $199.22 per share

- 2020-08: $221.30 per share

- 2020-09: $213.98 per share

- 2020-10: $213.86 per share

- 2020-11: $227.50 per share

- 2020-12: $259.24 per share

- 2021-01: $255.45 per share

- 2021-02: $245.21 per share

- 2021-03: $247.78 per share

- 2021-04: $247.06 per share

- 2021-05: $254.34 per share

- 2021-06: $275.79 per share

- 2021-07: $287.99 per share

- 2021-08: $332.24 per share

- 2021-09: $299.41 per share

- 2021-10: $333.18 per share

- 2021-11: $341.00 per share

- 2021-12: $368.50 per share

- 2022-01: $310.50 per share

- 2022-02: $312.39 per share

- 2022-03: $333.27 per share

- 2022-04: $286.79 per share

- 2022-05: $319.20 per share

- 2022-06: $303.70 per share

- 2022-07: $367.50 per share

- 2022-08: $346.02 per share

- 2022-09: $305.51 per share

- 2022-10: $292.55 per share

- 2022-11: $339.54 per share

- 2022-12: $319.29 per share

- 2023-01: $353.75 per share

- 2023-02: $363.76 per share

- 2023-03: $386.25 per share

- 2023-04: $371.32 per share

- 2023-05: $454.96 per share

- 2023-06: $435.41 per share

- 2023-07: $451.80 per share

- 2023-08: $458.89 per share

- 2023-09: $458.97 per share

- 2023-10: $469.44 per share

- 2023-11: $543.23 per share

- 2023-12: $514.91 per share

- 2024-01: $533.35 per share

- 2024-02: $573.73 per share

- 2024-03: $571.50 per share

- 2024-04: $530.59 per share

- 2024-05: $560.80 per share

- 2024-06: $595.06 per share

- 2024-07: $558.32 per share

- 2024-08: $519.58 per share

- 2024-09: $506.39 per share

- 2024-10: $513.61 per share

- 2024-11: $558.49 per share

- 2024-12: $485.36 per share

- 2025-01: $525.48 per share

- 2025-02: $457.28 per share

- 2025-03: $428.85 per share

- 2025-04: $459.01 per share

- 2025-05: $463.98 per share

- 2025-06: $512.68 per share

- 2025-07: $633.47 per share

- 2025-08: $603.52 per share

- 2025-09: $493.39 per share

- 2025-10: $453.82 per share

- 2025-11: $418.01 per share

- 2025-12: $469.72 per share

- 2026-01: $465.12 per share

- 2026-02: $414.00 per share

- 2026-03: $396.48 per share

- 2026-04: $482.60 per share

- 2026-05: $475.62 per share

- 2026-06: $446.07 per share

- 2026-07: $388.76 per share

- 2026-08: $439.59 per share

- 2026-09: $434.94 per share

- 2026-10: $494.51 per share

## Annual estimated value (USD per share)

- FY2016: low $35.37 per share, central $39.29 per share, high $44.51 per share

- FY2017: low $38.39 per share, central $42.80 per share, high $48.67 per share

- FY2018: low $41.29 per share, central $46.39 per share, high $53.17 per share

- FY2019: low $42.03 per share, central $47.23 per share, high $54.16 per share

- FY2020: low $56.81 per share, central $72.30 per share, high $83.32 per share

- FY2021: low $60.03 per share, central $66.99 per share, high $76.26 per share

- FY2022: low $72.01 per share, central $80.65 per share, high $92.14 per share

- FY2023: low $86.63 per share, central $97.26 per share, high $111.42 per share

- FY2024: low $125.11 per share, central $138.89 per share, high $157.23 per share

- FY2025: low $134.57 per share, central $157.12 per share, high $180.13 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:37:46.505Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/883241/000088324125000028/snps-20251031.htm); period 2025-10-31, filed 2025-12-22.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.