| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 21 | 67.7x | 17.6x | Bottom tier | |
Growth | 77 | 46.3% | 7.1% | Top tier | |
Quality | 70 | 1.4% | 4.5% | Top tier | |
Safety | 65 | 2.8x | 2.6x | Around median | |
Capital Return | 88 | — | 2.15% | Top tier | |
Momentum | 36 | -1.4% | 2.3% | Bottom tier | |
Sentiment | 90 | 15 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Synopsys provides engineering solutions spanning silicon design to system simulation, with revenue generated primarily from the Design Automation segment, which includes EDA software, hardware-assisted verification solutions, and the Ansys business, and from the Design IP segment, which licenses memory, connectivity, and die-to-die data-transfer interfaces. The Ansys acquisition, which marked one year since closing in the third quarter of fiscal 2026, expanded the company's scope into multiphysics simulation and digital engineering, while it works to develop the Factory 2 model combining licensing and royalties in custom IP solutions.
In the third quarter of fiscal 2026, revenue reached $2.477 billion, an increase of approximately 42%, and included about $711 million from Ansys. Net income according to EDGAR data was approximately $545.8 million, and GAAP earnings per share were $2.84, while the company reported adjusted earnings per share of $3.91 and an adjusted operating margin of 41.6%, exceeding the high end of its guidance.
The Design Automation segment generated revenue of approximately $2 billion and an adjusted operating margin of 45.2%, with EDA revenue growing 8.5% year over year. The Design IP segment returned to growth, with revenue rising 11% to $474 million at an adjusted operating margin of 26.5%, meaning Design Automation accounted for approximately 81% of quarterly revenue and Design IP for approximately 19%. Free cash flow reached $746 million, while Synopsys ended the quarter with $3.6 billion in cash and short-term investments and approximately $10 billion in debt.
The analyst consensus is "Buy," with an average price target of $554.22 and a wide range between $450 and $633, revealing meaningful differences in estimates of the impact of Ansys and the acceleration of EDA. The average target is below the 52-week range high of $615.79 and above its low of $366, while the highest target is slightly above the previous high and the lowest target remains within the range. In the absence of a displayed earnings multiple, the raised fiscal 2026 guidance should be weighed against approximately $10 billion in debt, the delayed contribution from Multiphysics Fusion until fiscal 2027, and the market's negative reaction following the August 26, 2026 results.
Figures in the text are as of 2026-09-02; the live price is shown at the top of the page.
Revenue reached $2.477 billion, an increase of approximately 42%, and included about $711 million from Ansys. EDA grew 8.5%, supported by software strength and record revenue from hardware-assisted verification solutions, while Design IP rose 11% to $474 million. The adjusted operating margin was 41.6% and adjusted earnings per share were $3.91, both exceeding the high end of the company's guidance.
Demand for Synopsys tools increases as customers transition to specialized chips, multi-die architectures, and advanced packaging; AMD used the 3DIC Compiler platform in Instinct MI455X. The company captured more than 95% of PCIe 7 opportunities, recorded 25 LPDDR6 design wins since the beginning of fiscal 2026, and surpassed 100 cumulative die-to-die interconnect wins. Management expects EDA growth to accelerate to a double-digit rate in the fourth quarter of fiscal 2026 and for the full fiscal year.
The acquisition marked one year since closing by the third quarter of fiscal 2026, and Ansys contributed approximately $711 million to that quarter's revenue. Synopsys raised its estimate of Ansys's contribution to fiscal 2026 revenue to approximately $2.98 billion and reported that cost synergies are ahead of schedule. The two companies also launched Multiphysics Fusion, which integrated thermal analysis into the chip-design workflow and delivered up to 10 times faster design closure for selected customers.
Automated analysis for informational purposes only — not investment advice.
Synopsys has more than 30 active customer engagements on its agentic AI platform, and the verification agent developed with NVIDIA demonstrated up to 50 times faster performance and a 20% improvement in coverage. Autonomous workflows introduced by the company with Microsoft and AMD also reduced the debugging cycle by up to 40%. Management believes agents will increase consumption of EDA tools required for accuracy and signoff verification, but subscription and consumption models remain under discussion and their financial contribution has not yet been disclosed.
The company expects revenue between $9.69 billion and $9.74 billion and an adjusted operating margin of 41.5% at the midpoint. Expected adjusted earnings per share range from $15.04 to $15.10, after the midpoint was raised by $0.31 due to higher revenue and operational efficiency. It also raised operating cash-flow guidance to approximately $2.8 billion and free cash-flow guidance to approximately $2.6 billion, with expected capital expenditures of approximately $225 million.
Synopsys ended the third quarter of fiscal 2026 with approximately $10 billion in debt versus $3.6 billion in cash and short-term investments, while integration-related restructuring costs continue. Growth strength depends on accelerating AI designs, while non-AI designs only stabilized following an earlier slowdown, and Korea's contribution approaches 20% of revenue in fiscal 2026. Management does not expect a significant contribution from Multiphysics Fusion during fiscal 2026, so converting the technical advantages of the joint solutions and agents into meaningful revenue remains a key test in fiscal 2027.
