SNPS Lost 36% In A Day. Do You Buy Or Wait?
Synopsys (SNPS) stock is down 35.8% in a day. The stock still looks expensive which, combined with history of only modest recovery post dips, suggests some risk. Consider the following data:
- Size: A $62 Bil company with $6.4 Bil in revenue currently trading at $387.78.
- Fundamentals: Last 12 month revenue growth of 8.0% and operating margin of 17.2%.
- Liquidity: Has Debt to Equity ratio of 0.24 and Cash to Assets ratio of 0.05
- Valuation: Currently trading at P/E multiple of 31.1 and P/EBIT multiple of 42.4
- Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 0% within a year.
While we like to buy dips if the fundamentals check out – for SNPS, see Buy or Sell SNPS Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and SNPS drops another 20-30% to $271.45 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Synopsys (SNPS) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: SNPS provides electronic design automation software and intellectual property solutions for integrated circuits, supporting USB, PCI Express, DDR, Ethernet, SATA, MIPI, HDMI, and Bluetooth low energy applications.
2022 Inflation Shock
- SNPS stock fell 30.6% from a high of $375.59 on 27 December 2021 to $260.83 on 11 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 August 2022
- Since then, the stock increased to a high of $645.35 on 30 July 2025 , and currently trades at $387.78
| SNPS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -30.6% | -25.4% |
| Time to Full Recovery | 91 days | 464 days |
2020 Covid Pandemic
- SNPS stock fell 34.3% from a high of $164.99 on 19 February 2020 to $108.48 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 May 2020
| SNPS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.3% | -33.9% |
| Time to Full Recovery | 58 days | 148 days |
2018 Correction
- SNPS stock fell 22.9% from a high of $102.81 on 13 September 2018 to $79.24 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 20 February 2019
| SNPS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -22.9% | -19.8% |
| Time to Full Recovery | 58 days | 120 days |
2008 Global Financial Crisis
- SNPS stock fell 49.1% from a high of $28.64 on 17 October 2007 to $14.59 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 9 February 2011
| SNPS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -49.1% | -56.8% |
| Time to Full Recovery | 811 days | 1480 days |
Worried that SNPS could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.