Is Most-Watched Stock Synopsys, Inc. (SNPS) Worth Betting on Now?

Core Viewpoint - Synopsys has experienced a significant decline in stock performance recently, with a return of -14.7% over the past month, which is worse than the Zacks S&P 500 composite's -8.3% and the Zacks Computer - Software industry's -8.6% [2] Earnings Estimates Revisions - For the current quarter, Synopsys is expected to post earnings of $3.39 per share, reflecting a year-over-year increase of +13% and a 30-day change in the Zacks Consensus Estimate of +3.1% [5] - The consensus earnings estimate for the current fiscal year is $14.88, indicating a +12.7% change from the prior year, with a slight 30-day change of +0.6% [5] - For the next fiscal year, the consensus estimate is $17.03, showing a +14.5% change from the previous year, although this estimate has decreased by -1.3% over the past month [6] Revenue Growth Projections - The consensus sales estimate for the current quarter is $1.6 billion, representing a year-over-year increase of +10.2% [9] - For the current fiscal year, the revenue estimate is $6.77 billion, indicating an +8.1% change, while the next fiscal year's estimate of $7.6 billion reflects a +12.3% change [9] Recent Performance and Surprise History - In the last reported quarter, Synopsys generated revenues of $1.46 billion, which is a year-over-year decline of -11.8%, and EPS of $3.03 compared to $3.56 a year ago [10] - The reported revenues exceeded the Zacks Consensus Estimate of $1.45 billion by +0.16%, and the EPS surprise was +7.83% [11] - Over the last four quarters, Synopsys has surpassed consensus EPS estimates three times and revenue estimates three times [11] Valuation Metrics - Synopsys is graded F on the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [15] - The assessment of valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) suggests that the stock may be overvalued relative to its historical values and peers [13][14] Overall Outlook - The Zacks Rank 3 suggests that Synopsys may perform in line with the broader market in the near term, despite the recent stock performance and valuation concerns [16]