Synopsys Stock Fell 13% in a Week, What Now?

Synopsys (SNPS) stock is down 13.3% in 5 trading days. The stock still looks expensive which, combined with history of only modest recovery post dips, suggests some risk. Consider the following data:

• Size: Synopsys is a $63 Bil company with $6.4 Bil in revenue currently trading at $393.43.
• 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: Synopsys stock is currently trading at P/E multiple of 31.5 and P/EBIT multiple of 43.0
• Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned 2.2% 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 $275 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. 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.

A single stock can be risky, but there is a huge value to a broader, diversified approach we take with the Trefis High Quality Portfolio. That is one way to look at stocks. The Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure.

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 $393.43

 
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

 
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

 
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

 
It is a good thing to keep in mind how low SNPS could go during a downturn. And you should also check how the stock fared when compared with 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.