Key Stats for Synopsys Stock
- Past-Week Performance: -3%
- 52-week Range: $366 to $652
- Valuation Model Target Price: $730
- Implied Upside: 45% over 2.8 years
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What Happened?
Synopsys stock fell about 3% over the past week, trading lower across several sessions and finishing near $500 as shares pulled back amid broader market volatility and recent valuation pressure.
The decline reflected near-term repositioning ahead of the company’s upcoming earnings report, with some investors trimming exposure after the stock’s strong longer-term run.
Analyst sentiment remained largely constructive. KeyCorp raised its price target to $600 from $575 and reiterated an Overweight rating, while Morgan Stanley lifted its target to $550 from $510 and maintained an Overweight rating, citing strong multi-year design visibility tied to AI and advanced-node complexity. Weiss Ratings reaffirmed a Hold (C) rating, reflecting a more balanced near-term view.
Overall, the pullback appeared driven by profit-taking and earnings positioning rather than a change in business fundamentals, keeping the stock closely tied to upcoming results and continued execution on AI-driven demand.
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Is Synopsys Undervalued?
Under valuation model assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 18.8%
- Operating Margins: 42.0%
- Exit P/E Multiple: 33.1x
Based on these inputs, the model estimates a target price of $730, implying 45% total upside from recent levels over the next 2.8 years.
Over the next year, results are likely shaped by sustained demand for advanced-node chip design, where rising AI workloads increase usage of Synopsys’ design, verification, and IP tools. Expansion in multi-year software subscriptions supports revenue visibility while allowing margins to scale as customers commit earlier in the design cycle.
Broader adoption of AI-assisted design and verification tools continues to deepen Synopsys’ role in customer workflows, reinforcing pricing strength and operating leverage.
At current levels, Synopsys appears undervalued, with future performance driven by earnings execution and AI-led demand rather than a valuation re-rating.
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