Synopsys Inc (SNPS, Financial) has recently captured the attention of investors and financial analysts with its strong financial performance. Currently trading at $584.99 per share, Synopsys Inc has experienced a daily increase of 2.07% and a three-month growth of 2.35%. A detailed analysis, supported by the GF Score, indicates that Synopsys Inc is poised for significant future growth.
What Is the GF Score?
The GF Score is a proprietary stock performance ranking system developed by GuruFocus. It evaluates stocks based on five key aspects: financial strength, profitability, growth, GF Value, and momentum. These aspects are weighted differently to calculate a comprehensive score ranging from 0 to 100, with 100 indicating the highest potential for outperformance. Synopsys Inc boasts a GF Score of 92, signaling strong future performance potential.
- Financial strength rank: 9/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 8/10
Understanding Synopsys Inc's Business
Synopsys Inc, with a market cap of $89.24 billion and annual sales of $6.13 billion, operates at the forefront of electronic design automation (EDA) software, intellectual property, and software integrity products. The company's EDA software enhances chip design processes, improving design accuracy and productivity. Synopsys' expanding portfolio benefits from the convergence of semiconductor and systems companies, driving growth in EDA customers and benefiting from the digitalization of various end markets.
Financial Strength Breakdown
Synopsys Inc's financial strength is evident in its impressive Interest Coverage ratio of 629.62, significantly surpassing the benchmark set by Benjamin Graham. Additionally, its Altman Z-Score of 15.71 indicates a strong buffer against financial distress, and a Debt-to-Revenue ratio of 0.11 showcases prudent debt management.
Profitability Rank Breakdown
Synopsys Inc's profitability is robust, with an Operating Margin of 23.04% in 2023, reflecting a consistent upward trend over the past five years. The company's Gross Margin also remains strong at 79.08%, indicating efficient revenue conversion into profit. The Piotroski F-Score and Predictability Rank further affirm its solid financial health and operational consistency.
Growth Rank Breakdown
Synopsys Inc's commitment to growth is demonstrated by its 16.7% 3-Year Revenue Growth Rate, outperforming 68.3% of peers in the Software industry. The company's EBITDA growth rates over the past three and five years highlight its capability to sustain growth and expand its operations effectively.
Conclusion
Considering Synopsys Inc's robust financial strength, impressive profitability, and consistent growth metrics, the GF Score underscores the company's strong position for potential market outperformance. Investors looking for similar opportunities can explore other high-performing companies using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
