SNPS Stock Climbs: Is Synopsys Worth Your Attention at Current Valuations?

Synopsys shares closed the latest trading day at $449.35, gaining 2.52% compared to the previous close. This performance notably exceeded the broader market—the S&P 500 managed just 0.25%, while the Nasdaq added 0.59%. However, looking at the bigger picture, SNPS has stumbled 1.67% over the past month, underperforming even as the tech sector faced a modest 1.69% decline.

What’s Next: The Earnings Question

The spotlight will turn to Synopsys’ earnings announcement scheduled for December 10, 2025. Here’s what Wall Street is watching: the company is expected to report an EPS of $2.79, representing a 17.94% drop year-over-year. On the revenue side, the consensus projects $2.25 billion for the quarter—a robust 37.59% increase from last year’s comparable period.

For the full-year outlook, analysts forecast SNPS will deliver $12.83 in earnings per share alongside $7.05 billion in revenue. The full-year numbers show a different story than Q3: EPS estimates are down 2.8%, while revenue remains essentially flat at 0% growth compared to 2024.

The Valuation Reality Check

Here’s where things get interesting. SNPS currently trades at a Forward P/E of 31.28, significantly above its industry peers, which average 24.87. That premium valuation tells a story: the market is pricing in considerable growth expectations.

The PEG ratio paints an even starker picture. Synopsys’ PEG stands at 3.28, nearly double the Computer-Software industry average of 1.81. For those unfamiliar, the PEG ratio combines price multiples with expected growth rates—values above 2 typically signal expensive positioning.

Recent Price Action and Analyst Sentiment

The momentum metrics are mixed. SNPS has seen analyst estimates tick 0.67% lower over the past month—a subtle shift that could signal cooling enthusiasm. Currently holding a Rank #3 (Hold) designation, the stock sits in neutral territory according to consensus ratings.

The chip design software sector itself maintains respectable industry standing, ranked 73rd out of 250+ industries, placing it in the top 30%. This suggests structural strength even if Synopsys faces individual headwinds.

The Bottom Line

Synopsys presents a textbook case of a quality company trading at a premium price. The upcoming earnings will be crucial—investors should monitor whether the company can justify its valuation with strong forward guidance or whether consensus estimates need further downward revision.