Analyzing Synopsys (SNPS) & The Competition

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

Earnings and Valuation

This table compares Synopsys and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Synopsys	$9.42 billion	$1.33 billion	81.75
Synopsys Competitors	$1.91 billion	$382.06 million	112.22

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

Profitability

This table compares Synopsys and its competitors’ 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	-599.26%	26.08%	-8.90%

Analyst Recommendations

This is a breakdown of recent recommendations for Synopsys and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Synopsys	0	3	22	1	2.92
Synopsys Competitors	5835	21614	45009	1500	2.57

Synopsys presently has a consensus price target of $575.00, suggesting a potential upside of 24.27%. As a group, “Software” companies have a potential upside of 27.87%. Given Synopsys’ competitors higher possible upside, analysts plainly believe Synopsys has less favorable growth aspects than its competitors.

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

Risk and Volatility

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

Summary

Synopsys beats its competitors 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.