Synopsys Stock Near Crucial Support – Buy Signal?
Synopsys (SNPS) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($378.87 – $418.75), levels from which it has bounced meaningfully before. In the last 10 years, Synopsys stock received buying interest at this level 4 times, rallying twice significantly, generating 34.4% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 2/14/2023 | 0.9% | 1 |
| 3/23/2023 | 2.5% | 11 |
| 5/17/2023 | 64.8% | 415 |
| 4/7/2025 | 69.4% | 114 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For SNPS Read Buy or Sell SNPS Stock to see how convincing this buy opportunity might be.
Ask yourself – Is holding SNPS stock risky? Of course it is. High Quality Portfolio mitigates that risk.
Here are some quick data points for Synopsys that should help decision:
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- Revenue Growth: 8.0% LTM and 9.7% last 3 year average.
- Cash Generation: Nearly 20.2% free cash flow margin and 17.2% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for SNPS was -3.1%.
- Valuation: SNPS stock trades at a PE multiple of 32.0
For quick background, Synopsys 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.
| SNPS | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Application Software | – |
| PE Ratio | 32.0 | 23.6 |
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| LTM* Revenue Growth | 8.0% | 6.1% |
| 3Y Average Annual Revenue Growth | 9.7% | 5.4% |
| Min Annual Revenue Growth Last 3Y | -3.1% | 0.2% |
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| LTM* Operating Margin | 17.2% | 18.8% |
| 3Y Average Operating Margin | 21.6% | 18.2% |
| LTM* Free Cash Flow Margin | 20.2% | 13.5% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
SNPS isn’t immune to big drops. It plunged over 60% in the Dot-Com Bubble and nearly 50% during the Global Financial Crisis. The 2018 correction and Covid selloff still knocked it down around 23% and 34%, respectively. Even the inflation shock took it about 30% lower. The stock may have solid fundamentals, but history shows sharp dips are part of the deal when markets turn sour.
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.