What are the investment risks for Synopsys Inc (SNPS)?

Ansys deal adds 16.7B goodwill to already-stretched balance sheet. Tangible book -12.4B. Any impairment destroys equity. P/E 66x vs industry median 30x and P/S 11.7x vs 3.9x median. 5Y EPS CAGR is -1.4%. Valuation assumes flawless execution.

Synopsys Inc

SNPS

—

Build a strategy around SNPS

Synopsys Inc AI Insights

Informational only. Not investment advice.

As of 2025-12-08

Snapshot

Goodwill of 26.9B is 98% of equity (27.6B) - tangible book value is NEGATIVE (-12.4B). Ansys acquisition risk concentrated here.[Goodwill]
Net income TTM 2.0B exceeds operating income 1.1B by 81% - non-operating gains inflating earnings quality.[Net Income TTM]
R&D spend of 2.3B TTM is 36% of revenue vs industry median 19% - heavy reinvestment sustains EDA moat.[Research and Development TTM]

Watch Triggers

Operating Margin TTM: Falls below 15% — Signals Ansys integration costs exceeding plan or pricing pressure in EDA market
Free Cash Flow TTM: Drops below 1.0B — Would indicate debt service straining operations; threatens R&D reinvestment
Goodwill: Any impairment charge — With tangible book at -12.4B, even small impairment signals overpayment for Ansys

Bull Case

EDA duopoly with Cadence creates near-monopoly pricing power. Gross margin 79% TTM, operating margin 17% vs industry median 0%. Chip complexity only increases.

Gross Margin TTMOperating Margin TTM

FCF of 1.3B TTM (20% FCF margin) with minimal capex (139M) funds R&D moat without dilution. Cash conversion ratio 90%+.

Free Cash Flow TTMCapital Expenditure TTM

Bear Case

Ansys deal adds 16.7B goodwill to already-stretched balance sheet. Tangible book -12.4B. Any impairment destroys equity.

GoodwillTangible Book ValuePurchase of Business

P/E 66x vs industry median 30x and P/S 11.7x vs 3.9x median. 5Y EPS CAGR is -1.4%. Valuation assumes flawless execution.

PE RatioPS RatioEPS Growth 5yr

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

45%

Leverage SNPS's top insights and create a custom strategy based on them in seconds. Our AI editor does it all — in one click.

Take Me to The Editor

Forward Thesis

Ansys integration will pressure margins and FCF for 12-24 months before synergy realization.

1-3yhigh

16.7B acquisition debt added (net debt now 11.8B)
Interest expense 267M TTM will rise with new debt
Integration costs typically run 2-3% of deal value

Purchase of business TTM: 16.7BNet long-term debt issuance: 4.3BDebt-to-equity rose to 0.55

EDA duopoly pricing power will sustain 79% gross margins despite macro headwinds.

1-3ymed

Chip complexity drives EDA demand regardless of cycle
Switching costs are prohibitive for customers
AI chip design requires advanced tools

Gross margin TTM 79% vs industry median 70%Operating margin 17% vs industry median 0%Revenue 6.4B TTM (12x industry median)

Valuation Context

Caveats

Public Strategies Rankings

See how Synopsys Inc ranks across different investment strategies.

Leverage SNPS's top insights and create a custom strategy in seconds. Our AI editor does it all — in one click.

SNPS Fundamentals

Information → Software Publishers

Metric	Value	YoY Growth	Industry Percentile
Market Cap	$74.84B		—
Enterprise Value	$86.25B		—
P/E Ratio	49		—
Total Revenue - TTM	$7.05B	+15.1%	—
Earnings Per Share (diluted) - TTM	$8.04	-48.2%	—
Operating Margin - TTM	13.0%	-9.2%	—
Net Margin - TTM	18.9%	-18.1%	—
Free Cash Flow - TTM	$1.35B	+5.1%	—
Return on Common Equity - TTM	7.14%	-22.8%	—
Beta 5Y (Monthly)	unknown		—

SNPS Dividend History

No dividends

SNPS Stock Splits

1 stock split

09/24/030.5:1 split

SNPS SEC Filings

Filing Date	Report Date	Report Type	Filing Link
12/22/25	10/31/25	10-K	0000883241-25-000028
09/09/25	07/31/25	10-Q	0000883241-25-000024
05/28/25	04/30/25	10-Q	0000883241-25-000017
02/26/25	01/31/25	10-Q	0000883241-25-000014
12/19/24	10/31/24	10-K	0000883241-24-000024
08/23/24	07/31/24	10-Q	0000883241-24-000021
05/24/24	04/30/24	10-Q	0000883241-24-000016
02/23/24	01/31/24	10-Q	0000883241-24-000013
12/12/23	10/31/23	10-K	0000883241-23-000019
08/18/23	07/31/23	10-Q	0000883241-23-000016
05/19/23	04/30/23	10-Q	0000883241-23-000012
02/17/23	01/31/23	10-Q	0000883241-23-000005
12/12/22	10/31/22	10-K	0000883241-22-000017
08/19/22	07/31/22	10-Q	0000883241-22-000014
05/20/22	04/30/22	10-Q	0000883241-22-000011
02/18/22	01/31/22	10-Q	0000883241-22-000003
12/13/21	10/31/21	10-K	0000883241-21-000022
08/20/21	07/31/21	10-Q	0000883241-21-000017
05/21/21	04/30/21	10-Q	0000883241-21-000012
02/19/21	01/31/21	10-Q	0000883241-21-000009
12/15/20	10/31/20	10-K	0000883241-20-000015
08/21/20	07/31/20	10-Q	0000883241-20-000012
05/22/20	04/30/20	10-Q	0000883241-20-000009
02/21/20	01/31/20	10-Q	0000883241-20-000006
12/20/19	10/31/19	10-K	0000883241-19-000019
08/26/19	07/31/19	10-Q	0000883241-19-000015
05/24/19	04/30/19	10-Q	0000883241-19-000011
02/25/19	01/31/19	10-Q	0000883241-19-000008
12/17/18	10/31/18	10-K	0000883241-18-000012
08/24/18	07/31/18	10-Q	0000883241-18-000008
05/25/18	04/30/18	10-Q	0000883241-18-000005
02/23/18	01/31/18	10-Q	0000883241-18-000002
12/14/17	10/31/17	10-K	0000883241-17-000014
08/18/17	07/31/17	10-Q	0000883241-17-000007
05/19/17	04/30/17	10-Q	0000883241-17-000005
02/17/17	01/31/17	10-Q	0000883241-17-000003
12/12/16	10/31/16	10-K	0000883241-16-000027
08/22/16	07/31/16	10-Q	0000883241-16-000022
05/24/16	04/30/16	10-Q	0000883241-16-000020
02/22/16	01/31/16	10-Q	0000883241-16-000017
12/14/15	10/31/15	10-K	0000883241-15-000014
08/24/15	07/31/15	10-Q	0000883241-15-000011
05/22/15	04/30/15	10-Q	0000883241-15-000008
02/24/15	01/31/15	10-Q	0000883241-15-000004
12/15/14	10/31/14	10-K	0000883241-14-000008
08/26/14	07/31/14	10-Q	0000883241-14-000005
05/28/14	04/30/14	10-Q	0001193125-14-213430
02/26/14	01/31/14	10-Q	0001193125-14-069985
12/20/13	10/31/13	10-K	0001193125-13-479653
08/30/13	07/31/13	10-Q	0001193125-13-353975
05/31/13	04/30/13	10-Q	0001193125-13-243521
03/04/13	01/31/13	10-Q	0001193125-13-088256
12/20/12	10/31/12	10-K	0001193125-12-510596
08/31/12	07/31/12	10-Q	0001193125-12-377617
06/04/12	04/30/12	10-Q	0001193125-12-257478
03/06/12	01/31/12	10-Q	0001193125-12-099331
12/16/11	10/31/11	10-K	0001193125-11-343034
09/02/11	07/31/11	10-Q	0001193125-11-240188
05/27/11	04/30/11	10-Q	0001193125-11-153412
03/02/11	01/31/11	10-Q	0001193125-11-053667
12/17/10	10/31/10	10-K	0001193125-10-282648
09/08/10	07/31/10	10-Q	0001193125-10-206743
06/04/10	04/30/10	10-Q	0001193125-10-133054
03/09/10	01/31/10	10-Q	0001193125-10-051446
12/18/09	10/31/09	10-K	0001193125-09-255277
09/09/09	07/31/09	10-Q	0001104659-09-053842
06/10/09	04/30/09	10-Q	0001104659-09-037483
03/09/09	01/31/09	10-Q	0001104659-09-015587
12/22/08	10/30/08	Unknown	--
09/09/08	07/31/08	10-Q	0001104659-08-057756
06/10/08	04/30/08	10-Q	0001104659-08-039072
03/12/08	01/29/08	Unknown	--
12/21/07	10/30/07	Unknown	--
09/13/07	07/31/07	10-Q	0001104659-07-068817
06/06/07	04/30/07	10-Q	0001104659-07-045552
03/09/07	01/28/07	Unknown	--
01/11/07	10/30/06	Unknown	--
09/06/06	07/31/06	10-Q	0001104659-06-059654
06/08/06	04/30/06	10-Q	0001104659-06-040534
03/09/06	01/28/06	Unknown	--
01/12/06	10/30/05	Unknown	--
09/06/05	07/31/05	10-Q	0001104659-05-042780
06/02/05	04/30/05	10-Q	0001104659-05-026547
03/10/05	01/28/05	Unknown	--
01/12/05	10/31/04	8-K	0001104659-05-001099
09/14/04	07/31/04	10-Q	0001104659-04-027593
06/10/04	04/30/04	10-Q	0001104659-04-016631
03/16/04	01/29/04	Unknown	--
01/29/04	10/30/03	Unknown	--
09/15/03	07/31/03	Unknown	--
06/16/03	04/30/03	Unknown	--
01/31/03	01/28/03	Unknown	--
01/29/03	10/30/02	Unknown	--
09/17/02	07/31/02	10-Q	0001166063-02-000014
06/17/02	04/30/02	Unknown	--
03/18/02	01/28/02	Unknown	--
01/25/02	10/30/01	Unknown	--
09/18/01	07/31/01	10-Q	0000891618-01-501792
06/15/01	04/30/01	10-Q	0000891618-01-501208
03/20/01	01/28/01	Unknown	--
01/26/01	10/30/00	Unknown	--
09/12/00	07/31/00	10-Q	0001095811-00-003321
06/13/00	04/30/00	10-Q	0000891618-00-003339
03/14/00	01/29/00	Unknown	--