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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Synopsys, Inc. (XNAS:SNPS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SNPS
Name:
SYNOPSYS, INC. (XNAS:SNPS)
Sector:
113.50M
Industry:
Software�Infrastructure
CEO:
Dr. Aart de Geus
Total Employees:
16,361
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 62.39% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SYNOPSYS, INC.(SNPS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�INFRASTRUCTURE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
330.56
One Month Price Target:
$332.85
Six Month Price Target :
$344.31
Likely Price in One Year's Time:
Ticker:
$358.07
Likely Trading Range Today Under (Normal Volatility)
$329.73
Price Upper limit ($) :
$332.47
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$314.55
This week:
$294.76
This month :
$258.96
Other Primary facts
Market Cap:
50.55B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
152.91M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.2%
-13.19%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$404.71
$369.78
$256.41
$291.34
Medium risk (<10%) entry points
Buy Call
Sell Call
$358.41
Buy Put:
Sell Put:
$350.95
$302.61
$310.17
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SNPS
Sharpe Ratio:
6.34%
Comparison:
SNPS, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 287.51% higher than the industry
& ratio is 177.96% higher than the market/S&P 500 average
Average Returns/Yield of
SNPS
Daily returns:
0.16%
Weekly returns:
0.82%
Monthly returns:
3.27%
Yearly returns:
14.38%
Comparison of returns:
Average annual returns/yield (last 3 years) is 172.49% above industry average
Classification:
SNPS, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.44
Statistical test of Returns:
SNPS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.44%
Weekly Volatility:
5.45%
Monthly Volatility:
10.90%
Yearly Volatility:
37.77%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.81%
Volatility in last five trading days has been -25.96% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.84%
Weekly VaR:
-10.83%
Monthly VaR:
-21.66%
How Much Can the price of
SNPS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-75.04%
This translates to price declining to:
$273.45
This translates to price declining to:
$82.52
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SNPS is a 52.88% riskier investment compared to the market/S&P 500 & is 30.97% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -26.83% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SNPS
Beta in relation to market/S&P 500--1.24
Expected beta in 1 year's time:
0.892
Expected beta in 3 year's time:
1.261
Unlevered (debt free) Beta:
1.139
Beta in relation to Nasdaq (XNAS):
1.121
Beta in relation to all global stocks::
0.723
Beta Comparison & Analysis
Beta of competitors/peers::
1.298
Beta is -4.59% lower than peers
Average Industry Beta:
1.112
Beta is 11.39% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.84%
Sustainable growth rate is -95.98% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.276
Alpha is 661.80% above industry average alpha yield
Alpha is 1754% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SNPS
Equity cost of capital:
0.116
Equity cost of capital is 8.06% above industry mean WACC
Unlevered (without debt) cost of capital:
10.70%
Before-tax cost of debt:
0.47%
After-tax cost of debt:
0.37%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.37%
WACC is 44.64% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$31.12
Revenue growth rate per share of (3Y):
9.38
Annual revenue growth rate is -56.84% below industry average
EPS:
$6.42
Expected Annual growth rate of EPS (3Y):
17.64%
Expected future EPS growth rate is -41.43% lower than the Software�Infrastructure industry
Free cash flow (FCF) per share:
$10.40
-
-
Debt per share
$3.28
EBITDA per share
$8.50
Valuation Analysis Today of
SNPS
P/E Ratio:
50.18
P/E Ratio of Competitors/Peers:
175.94
P/E ratio is -71.48% lower than main peers & is -23.07% lower than the industry
Stock price/value with industry average P/E ratio: $418.81
SNPS is -21.07% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
10.62
Price to sales ratio is -3.29% below the industry mean
P/B (Price to book value ratio):
9.38
Price to free cash flow: 31.78
-
Net income growth rate (3Y):
70.94%
Net income growth rate is -99.16% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
9.32%
Net debt to equity ratio:
-10.09%
Debt to assets ratio:
5.64%
Net debt to assets ratio:
-6.11%
Debt-to-asset ratio is -91.91% below industry average
Ability to repay debt:
Interest coverage ratio:
477.6
Interest coverage ratio is -326.33% less than industry average
Looking forward:
Debt growth rate:
421.29%
Annual debt growth is 292% higher than industry average debt growth rate
Debt repayment rate in last quarter: 13.14%
Analysis of Key Statistics
Correlation of price movement with the market:
0.759
Statistical significance of correlation:
SNPS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.48
Stock price is 58.19% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.48
Correlation of price movement with Nasdaq (^IXIC):
-0.015
Covariance of price movement with the market:
-0.021
Kurtosis
2.967
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.02
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SNPS
Gross Profit Margin Ratio:
320%
Operating Profit Margin Ratio:
23.18%
Operating profit margin is -295.27% lower than the industry
Net Profit Margin Ratio:
320%
Effective Tax Rate:
6.73%
Effective tax rate is -78.51% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.72%
Return on equity (ROE) is -82.46% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
11.33%
Return on assets (ROA) is -399.20% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.19
Current ratio is -48.77% below industry average
Cash Conversion Cycle (days):
105.2
Cash conversion cycle is -6.54% below industry average
The remaining useful life of property plant & equipment is: 8.6 years
Stock based compensation to net income ratio:
9.50%
In-depth Efficiency Analysis
Revenue generated per employee:
290.9K
Each employee generates -26% less revenue than industry average revenue per employee
EBITDA generated per employee:
79.4K
Each employee generates 22% more EBITDA than industry average revenue per employee
Profit generated per employee:
61.6K
Each employee generates 194% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
6.9K
Each employee generates -65% less free cash flow than industry average revenue per employee
Assets/Capital per employee
363.9K
Each employee generates -65% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 17.65%
Growth rate in R&D investment/expenditure is -780.82% lower than the industry
Competitors/Peer firms of
SNPS
OKTA, INC. (XNAS:OKTA)
CADENCE DESIGN SYSTEMS, INC. (XNAS:CDNS)
DOCUSIGN, INC. (XNAS:DOCU)
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION (XNAS:CTSH)
MICROCHIP TECHNOLOGY INCORPORATED (XNAS:MCHP)
Mediobanca Banca di Credito Finanziario SpA (XMIL:MB)
THE TRADE DESK, INC. (XNAS:TTD)
CROWDSTRIKE HOLDINGS, INC. (XNAS:CRWD)
MARVELL TECHNOLOGY, INC (XNAS:MRVL)
Current Analyst Ratings
Strong buy�17%
Buy�13%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
4.76B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
949.59M
3.81B
1.56B
327.77M
1.07B
741.19M
33.13M
2.66B
3.83M
2.72M
215.57M
1.30B
1.10B
1.01B
1.08B
72.68M
1.01B
Statement of Cash Flow
Date:
Period:
61.69M
Differed Income Tax :
- 11952.00K
Stock Based Compensation :
95.77M
Change in Working Capital :
- 350958.00K
Accounts Receivables:
- 466684.00K
Other Working Capital:
361.54M
Other Non-Cash Items:
47.51M
Net Cash Provided by Operating Activities:
155.74M
Investments in PP&E:
- 41751.00K
Net Acquisitions:
- 19989.00K
Purchases of Investments:
- 22210.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/31/22
2022
Q1
1.12B
147.75M
1.27B
1.04B
212.92M
423.78M
2.95B
959.05M
3.59B
260.81M
1.12B
628.88M
- 611974.00K
5.95B
-
8.90B
29.20M
78.75M
-
1.85B
511.53M
2.47B
501.86M
380.14M
1.04B
-
3.51B
1.53M
4.86B
- 51457.0K
573.30M
January 31, 2022 at 7:00:00 AM
3.61B
5.39B
8.90B
1.27B
580.61M
- 543694.0K
17.02M
- 1094.00K
- 68025.00K
- 75938.00K
30.84M
- 210000.00K
-
- 139494.00K
- 394597.00K
- 1720.00K
- 308598.00K
1.13B
1.44B
155.74M
- 42245.00K
113.50M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
SNPS
2023
2024
2025
2026
2027
$359.86
$704.91
$763.58
$827.12
$895.96