{"id":565,"date":"2026-09-09T04:26:00","date_gmt":"2026-09-09T04:26:00","guid":{"rendered":"https:\/\/andyguy.com\/?p=565"},"modified":"2026-09-09T00:18:53","modified_gmt":"2026-09-09T00:18:53","slug":"synopsys-snps-q3-fy2026-earnings-review-price-target","status":"publish","type":"post","link":"https:\/\/andyguy.com\/en\/synopsys-snps-q3-fy2026-earnings-review-price-target\/","title":{"rendered":"Synopsys (SNPS) Q3 Earnings Review: What the +42% Revenue Hidden and Why I Lowered My Target to $420"},"content":{"rendered":"<p class=\"wp-block-paragraph\">I also paused for a moment while looking at the chart again. The stock, which jumped 13.41 TP3T the day after earnings, had returned to its original level in just six trading days. My conclusion is Hold, and the 12-month baseline target price is $420 (approximately 564,060 KRW). I will explain step-by-step why I lowered my target from the $550 I set in July.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>The figures in this article are based on the US market close on September 8, 2026. The Korean Won was calculated using a standard exchange rate of 1,343 KRW per dollar on the same day.<\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"#verdict-first\">First, the conclusion: Investment opinion and target price<\/a><\/li><li><a href=\"#earnings-review\">Synopsis (SNPS) Q3 Earnings Review<\/a><\/li><li><a href=\"#why-the-drop\">The reason 13% gave back its surge after 6 trading days<\/a><\/li><li><a href=\"#valuation\">Synopsis (SNPS) Valuation: Basis for a Fair Multiple of 26x<\/a><\/li><li><a href=\"#peers\">If you look at it side by side with Cadence and PTC<\/a><\/li><li><a href=\"#price-target\">Synopsis (SNPS) 12-Month Target Price Scenario<\/a><\/li><li><a href=\"#risks\">Synopsis (SNPS) Risk and Bearish Trigger<\/a><\/li><li><a href=\"#author-view\">Honestly, the part I hesitated about<\/a><\/li><li><a href=\"#verdict\">Investment Opinion Conclusion<\/a><\/li><li><a href=\"#faq\">Frequently Asked Questions<\/a><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"verdict-first\">First, the conclusion: Synopsys (SNPS) Investment Opinion and Target Price<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Synopsys\u2019 revenue for the third quarter of fiscal 2026 was $2.4768 billion (approx. 3.33 trillion won), up 42.41 TP3T from a year ago, and non-GAAP earnings per share (EPS) exceeded expectations at $3.91 (approx. 5,251 won).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, more than half of this growth is due to the combined effect of ANSYS, which was acquired in 2025. Excluding ANSYS, the growth rate of the core design software business is 8.51 TP3T, falling short of the mid-double-digit growth the company has traditionally demonstrated.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The 12-month baseline target price is $420 (approx. 564,060 KRW), and the investment rating is Hold (Medium confidence). With an expected return of approximately 8.41 TP3T relative to the current price of $392.03 (approx. 526,496 KRW), I view this as a tricky zone where it is neither clear to buy nor sell.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The table below forms the backbone of this article. It summarizes the process of moving from the current multiple attached to the stock price to the multiple I consider appropriate at a glance. Please read from left to right.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>step<\/th><th>\uac12<\/th><th>Why is this value?<\/th><\/tr><\/thead><tbody><tr><td>Current forward P\/E<\/td><td>22.4 times<\/td><td>Stock price $392.03 \u00f7 12-month estimated EPS $17.51 (approx. 23,516 KRW)<\/td><\/tr><tr><td>peer drainage<\/td><td>Cadence 29.8x \/ PTC 15.0x<\/td><td>Same design and simulation software industry<\/td><\/tr><tr><td>The appropriate drainage I saw<\/td><td>26 times<\/td><td>13% discount relative to cadence (reflecting operating profit margin, debt, and restructuring risks)<\/td><\/tr><tr><td>The multiplier-based goal<\/td><td>$455<\/td><td>$17.51 \u00d7 26 times<\/td><\/tr><tr><td>Cash flow (DCF) based<\/td><td>$298\u2013$431<\/td><td>Discount rate 9~101 TP3T, terminal growth rate 2.5~3.01 TP3T<\/td><\/tr><tr><td>The final basic goal is<\/td><td>$420<\/td><td>Multiplier 60% + DCF 40% Compromise<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"earnings-review\">Synopsis (SNPS) Q3 Earnings Review: The Numbers Were Good<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Let&#039;s start by briefly out what kind of company Synopsys is. It is a company that develops software (EDA, Electronic Design Automation) used for designing semiconductor chips. Just as architects use CAD to draw blueprints, chip design engineers at Nvidia or Apple cannot even begin work without the tools of Synopsys and Cadence. Furthermore, by acquiring Ansys, the number one simulation software company, for approximately $35 billion (about 47.0 trillion won) in July 2025, it has become a company that sells a complete package ranging from chip design to physical verification of finished products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The earnings were released after the U.S. market closed on August 26. Revenue for the third fiscal quarter, which ended July 31, was $2.4768 billion (approximately 3.33 trillion won), an increase of 42.41 TP3T from $1.7397 billion (approximately 2.34 trillion won) a year earlier. The gross profit margin was 72.61 TP3T, meaning that for every 100 won worth of software sold, 72.6 won remains after deducting direct costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It was a welcome development that the design IP (proven circuit design blocks used on other companies&#039; chips) segment, which had been sluggish for some time, returned with growth to $473.8 million (approximately 636.3 billion KRW). This slightly exceeded market expectations of $471.1 million. Since this segment had been the cause of the stock price being suppressed throughout the past year, I believe the sign of recovery itself is significant.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The company also raised its guidance. It increased its annual revenue target to $9.69 billion to $9.74 billion (approximately 13.01 trillion to 13.08 trillion won) and its non-GAAP EPS to $15.04 to $15.10 (approximately 20,199 to 20,279 won). This amounts to an increase of $0.31 based on the median value, which is typically a level welcomed by the stock price. The guidance for the fourth quarter is revenue of $2.53 billion to $2.58 billion and EPS of $4.10 to $4.16.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, we must point out the $1.07 difference between the Generally Accepted (GAAP) earnings per share of $2.84 (approx. 3,814 KRW) and the Non-GAAP figures of $3.91 (approx. 5,251 KRW). The Non-GAAP figures are those adjusted by the company with the stance of &quot;excluding one-time costs and focusing solely on performance.&quot; The GAAP net income of $545.8 million (approx. 733 billion KRW) includes the entire gain of $425.4 million (approx. 571.3 billion KRW) from the sale of business units. Conversely, the amortization of intangible assets resulting from the acquisition of Ansys and stock compensation expenses amounting to $950 million (approx. 1.28 trillion KRW) annually are excluded from the Non-GAAP figures. It was only after placing these two numbers side by side that I was able to make a judgment regarding the &quot;quality of earnings.&quot;.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"why-the-drop\">The reason 13% gave back its surge after 6 trading days<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is the most interesting part of this post. I organized the closing prices into a table, and it clearly showed the process of the market&#039;s sentiment changing.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>date<\/th><th>Closing price (dollar)<\/th><th>fluctuations<\/th><th>What happened that day<\/th><\/tr><\/thead><tbody><tr><td>August 26th<\/td><td>410.00<\/td><td>+0.3%<\/td><td>Q3 earnings announcement after market close<\/td><\/tr><tr><td>August 27<\/td><td>464.89<\/td><td>+13.4%<\/td><td>Surges on Upgraded Earnings and Guidance<\/td><\/tr><tr><td>August 28th<\/td><td>442.61<\/td><td>-4.8%<\/td><td>Realizing profits<\/td><\/tr><tr><td>September 1st<\/td><td>414.82<\/td><td>-5.6%<\/td><td>Gives back most of the gains<\/td><\/tr><tr><td>September 4th<\/td><td>393.84<\/td><td>-5.4%<\/td><td>News of expanded scale of restructuring<\/td><\/tr><tr><td>September 8th<\/td><td>392.03<\/td><td>-0.5%<\/td><td>Slight decline despite Morgan Stanley&#039;s upgrade<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">If you look at the chart, after rising 13.41 TP3T in a single day on August 27, it returned exactly to its pre-announcement level in just six trading days. I interpret this pattern as a signal that &quot;earnings were good, but not for the reasons people wanted to buy.&quot;.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The decisive blow came on September 4th. The company raised its pre-tax restructuring cost estimate to $425 million to $500 million (approximately 570.8 billion to 671.5 billion KRW) as it announced plans to cut its global workforce by about 101 TP3T\u2014roughly 2,000 employees\u2014and close offices. When a company that announced a 421 TP3T increase in revenue cuts its workforce by 101 TP3T just ten days later, investors are bound to ask, &quot;Why would a growing company do this?&quot;.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I believe the answer lies in the integration of Ansys. It is a process of creating synergy by streamlining redundant organizations; if it goes according to plan, margins will increase, but if it doesn&#039;t, it will end up as just incurring costs. When Morgan Stanley raised its investment rating to Overweight and set a target price of $500 (approximately 671,500 KRW) on September 8, the basis they cited was precisely that they \u201cgained confidence in Ansys synergy.\u201d. <a href=\"https:\/\/www.investing.com\/news\/stock-market-news\/morgan-stanley-upgrades-synopsys-as-it-turns-selective-on-chip-stocks-4891583\" rel=\"nofollow noopener\" target=\"_blank\">You can view the summary of the report here.<\/a> It seems the market is worried about the same event while analysts see it as an opportunity, but I think this debate will determine stock prices for the next two or three quarters.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"valuation\">Synopsis (SNPS) Valuation: Basis for a Fair Multiple of 26x<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Valuation is the process of determining whether a stock is cheap or expensive. Currently, Synopsys&#039; forward P\/E (price-to-earnings ratio) is 22.4 times. This is calculated by dividing the 12-month estimated EPS of $17.51 (approximately 23,516 KRW) by the current share price of $392.03. A P\/E ratio of 22.4 means that it would take 22.4 years for earnings at the current level to accumulate to reach the current share price.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I am <a href=\"https:\/\/andyguy.com\/en\/synopsys-snps-stock-analysis-price-target-2026\/\">Synopsis analysis written in July<\/a>I had set the target price at $550. The rationale at the time was that &quot;Cadence is 42x while Synopsis is 26x, so it is in the discount range,&quot; but upon recalculating, that premise had collapsed. Cadence&#039;s forward P\/E has dropped to 29.8x. If the entire benchmark falls, it is correct that my appropriate multiple should also drop along with it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, I readjusted the appropriate multiple to 26 times. The closest competitor <a href=\"https:\/\/andyguy.com\/en\/cadence-cdns-stock-analysis-price-target-2026\/\">Cadence (CDNS)<\/a>This represents a reduction of approximately 131 TP3T from 29.8x, and there are three reasons for this cut. First, the operating profit margin is 14.51 TP3T, falling significantly short of the cadence of 28.61 TP3T. Second, net debt stands at $7.234 billion (approximately 9.72 trillion KRW), which is more than six times the cadence. Third, as restructuring is still underway, margin improvement is not a guaranteed future.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Applying a multiple of 26x yields a target price of $455. Based on this alone, it implies a potential upside of 161 TP3 T relative to the current price. However, I also calculated it once more based on cash flow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">DCF is a method that calculates a company&#039;s future cash earnings at today&#039;s value and adds them. The assumptions are as follows.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>home<\/th><th>\uac12<\/th><th>reason<\/th><\/tr><\/thead><tbody><tr><td>Discount rate (WACC)<\/td><td>9.0~10.0%<\/td><td>Beta 1.23, reflecting net debt burden<\/td><\/tr><tr><td>End-of-life growth rate<\/td><td>2.5~3.0%<\/td><td>Long-term GDP growth rate + prices<\/td><\/tr><tr><td>forecast period<\/td><td>5 years<\/td><td>Visibility until Ansys integration is complete<\/td><\/tr><tr><td>Standard free cash flow<\/td><td>$2.748 billion (approximately 3.69 trillion won)<\/td><td>Total of the last four quarters<\/td><\/tr><tr><td>Calculated fair value<\/td><td>$298\u2013$431<\/td><td>The median is about $360<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Free Cash Flow (FCF) is the actual cash remaining after deducting capital expenditures from earnings. The total for the last four quarters is $2.748 billion (approximately 3.69 trillion won), but there is a catch. According to accounting rules, stock compensation expenses are non-cash expenses, so they are added back into the FCF calculation. However, the equity of existing shareholders is actually diluted by the amount of stock given to employees. If you subtract the annual $950 million (approximately 1.28 trillion won), the actual FCF drops to around $1.8 billion.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Ultimately, I had to make a decision between the multiple of $455 and the median DCF of $360. I settled on $420 by giving 601 TP3 T to the multiple and 401 TP3 T to the DCF. The reason I gave more weight to the multiple is that software companies are actually valued that way, and the reason I did not ignore the DCF is that this company now has 14.56 trillion won in debt.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"peers\">If you look at it side by side with Cadence and PTC<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>item<\/th><th>Synopsis (SNPS)<\/th><th>Cadence (CDNS)<\/th><th>PTC<\/th><\/tr><\/thead><tbody><tr><td>Preceding P\/E<\/td><td>22.4 times<\/td><td>29.8 times<\/td><td>15.0 times<\/td><\/tr><tr><td>Recent quarterly revenue growth<\/td><td>+42.4%<\/td><td>+24.2%<\/td><td>-6.8%<\/td><\/tr><tr><td>Operating profit margin<\/td><td>14.5%<\/td><td>28.6%<\/td><td>28.2%<\/td><\/tr><tr><td>net debt<\/td><td>Approximately $7.2 billion<\/td><td>About $1.1 billion<\/td><td>About $1.3 billion<\/td><\/tr><tr><td>1-Year Stock Price Fluctuation<\/td><td>-34.8%<\/td><td>-19.1%<\/td><td>-30.9%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">You can read this table from top to bottom. Synopsys has the highest growth rate but a lower multiple than Cadence; however, its profit margin and financial structure are the weakest of the three. Considering that the growth rate figure includes Ansys, I do not think the difference in multiples is entirely unreasonable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What stands out is that all three have dropped between 20 and 351 TP over the past year. This means the entire design software industry is undergoing de-rating (assigning lower multiples to the same earnings), but this is not a problem unique to Synopsys. The demand for AI chips is <a href=\"https:\/\/andyguy.com\/en\/nvidia-nvda-q2-fy2027-earnings-cash-flow-analysis\/\">NVIDIA (NVDA) earnings<\/a>As seen in the figure, the market is still hot, but the profit growth of design tool companies is not keeping up with the pace, and this judgment is reflected in the multiples.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"price-target\">Synopsis (SNPS) 12-Month Target Price Scenario<\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>scenario<\/th><th>Target price<\/th><th>Compared to the current price<\/th><th>weight<\/th><th>premise<\/th><\/tr><\/thead><tbody><tr><td>Bull<\/td><td>$530 (approx. 711,790 won)<\/td><td>+35.2%<\/td><td>25%<\/td><td>Early Realization of Ansys Synergies, Continued Double-Digit Growth in Design IP, Recovery to 30x Multiple<\/td><\/tr><tr><td>Base<\/td><td>$420 (approx. 564,060 won)<\/td><td>+7.1%<\/td><td>50%<\/td><td>Maintaining an appropriate multiple of 26x, restructuring proceeding as planned<\/td><\/tr><tr><td>Bear<\/td><td>$330 (approx. 443,190 won)<\/td><td>-15.8%<\/td><td>25%<\/td><td>Core EDA growth slows to below 5%, integration costs exceed, multiples below 20x<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The weighted average of the three scenarios yields $425, with an expected return of approximately 8.41 TP3T. There is a reason I weighted them evenly at 50:25:25. Looking solely at valuation, it is in a range 13.81 TP3T cheaper than the fair multiple, so it would be reasonable to place more weight on the bullish side; however, the risk of implementing restructuring is currently placing that much weight on the opposite side. I have not yet found enough evidence to tip the scales to one side.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For reference, the average target price from 26 analysts is $544.97 (approximately 731,895 KRW), which is 301 TP3T higher than my baseline scenario. The reason for this discrepancy is clear. The market is applying the same multiples to post-acquisition earnings that were applied to Synopsys prior to the Ansys acquisition. I believe the upper limit is 26 times when factoring in three elements: core EDA growth of 8.51 TP3T, net debt of 9.72 trillion KRW, and annual stock compensation of 1.28 trillion KRW.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"risks\">Synopsis (SNPS) Risk and Bearish Trigger<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>First, it is the slowdown in core EDA growth.<\/strong> If the design tools business, excluding Ansys, remains at 8.51 TP3T growth, the market will no longer treat this company as a growth stock. The impact comes immediately in terms of multiples. A way to verify this is to separate the revenue of the Design Automation segment from Ansys&#039;s contribution during the quarterly earnings announcement. Segment-by-segment figures are available in the earnings press releases on the company&#039;s IR page.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Second is the risk of implementing restructuring.<\/strong> The 101 TP3T workforce reduction is a short-term cost and a factor for mid-term margin improvement; however, if key engineers leave along with the workforce, the product roadmap will be delayed. The metric to watch is the non-GAAP operating profit margin for the next two quarters. If the improvement falls short of 11 TP3T points per quarter, you can consider the synergy story to be cracked.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Third, it is the issue of profit quality.<\/strong> Annual stock compensation expenses of $950 million (approximately 1.28 trillion won) amount to about 101 TP3T of revenue. The 22.4 times calculated after deducting this expense creates an illusion that the stock is \u201ccheap.\u201d You can verify the trend yourself by dividing the stock compensation expense item by revenue in the cash flow statement of the quarterly report (10-Q).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Fourth, there are China&#039;s sales and export regulations.<\/strong> Since EDA is subject to U.S. government export controls, sales in a specific region can be completely shaken by a single line of policy. There was even an instance of this happening once in 2025.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bear triggers I see are clear. If design IP growth falls back to single digits in the fourth-quarter earnings, if restructuring costs exceed $500 million, or if FY2027 guidance falls short of the consensus, I intend to lower the price target back toward $330.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"author-view\">Honestly, the part I hesitated about<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">I had the 8-K filing and the earnings press release open side by side and paused for quite a while as I read them. On one side, it read, \u201cRevenue increased by 421 TP3T, guidance raised,\u201d while on the other, it read, \u201cPersonnel cut by 101 TP3T, restructuring costs up to $500 million.\u201d I believe the fact that these two statements came from the same company, just ten days apart, pretty much explains the flow of this week. It is as if the language of a growing company and the language of a restructuring company are mixed together within a single quarter.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As someone who projected $550 in my July post, this downward revision wasn&#039;t exactly comfortable for me. Back then, the benchmark was a cadence of 42x, whereas now it stands at 29.8x. It is less that my calculations were wrong and more that the industry&#039;s overall expectations have shifted. Therefore, I summarized my conclusion not as &quot;the company has gotten worse,&quot; but rather as &quot;the price tag is returning to normal, and it is not yet at an attractive level.&quot; Personally, I plan to crunch the numbers again if it drops below $370.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"verdict\">Synopsis (SNPS) Investment Opinion Conclusion: Hold<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Here is the process by which I decided on a Hold. First, the current multiple of 22.4x is 13.81 TP3T lower than my fair value of 26x, so an undervaluation signal was triggered. However, the expected return of 8.41 TP3T fell short of my buy threshold of 121 TP3T, and the fundamentals were closer to a restructuring than an improvement. Since the valuation points slightly toward buying and the execution risk clearly points toward a wait-and-see approach, the point where these two signals intersect is the Hold position.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There is a gap of 301 TP3T between Wall Street&#039;s average target price of $544.97 and my $420, and I intend to leave this discrepancy as it is without hiding it. If the consensus is correct, it means I was conservative; if I am right, it means the market is viewing this company based on memories from before Ansys. The crossroads of judgment narrow down to the operating profit margin for the next two quarters.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you already hold the stock, I believe it is a good time to watch until the Q4 earnings. If you are thinking of buying a new one, I would not rush you. As for the position of semiconductor design software itself... <a href=\"https:\/\/andyguy.com\/en\/broadcom-avgo-q3-fy2026-earnings-review-price-target\/\">Demand for AI chip designs like Broadcom (AVGO)<\/a>As long as it continues, it will not disappear. However, a good company and a good price are different matters, and I do not believe the latter is the case yet.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"faq\">Synopsis (SNPS) FAQ<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">What do you estimate the target stock price for the synopsis to be?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">My 12-month baseline target price is $420 (approximately 564,060 KRW). I set the target at $530 for a bullish scenario and $330 for a bearish scenario. These figures are significantly more conservative than the average target price of $544.97 from 26 analysts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">It rose by 131 TP3T the day after the earnings report, so why did it fall again?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The momentum took a turn on September 4 when the company announced a workforce reduction of 101 TP3T and restructuring costs of up to $500 million. The combination of a company announcing 421 TP3T in revenue growth immediately cutting its workforce made the market uncomfortable.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sales increased by 421 TP3T, so why don&#039;t you consider it a growth stock?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This is because a significant portion of the increase is due to the combined effect of the Ansys acquisition. Ansys contributes approximately $2.98 billion (about 4.00 trillion won) annually, but the growth rate of core design software excluding this is around 8.51 TP3T. Since the acquisition effect is growth that disappears after one year, it cannot sustain the multiple.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Isn&#039;t a forward P\/E of 22x on the cheap side?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">It looks cheap on the surface. However, this 22.4x multiple is based on non-GAAP earnings excluding $950 million in annual stock compensation expenses. If you include these expenses, the actual multiple exceeds 30x. That is why I didn&#039;t use the word &quot;cheap.&quot;.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Which is better when compared to Cadence (CDNS)?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">If you look solely at financial soundness and profit margins, Cadence clearly has the upper hand. Its operating profit margin is 28.61 TP3T versus 14.51 TP3T, and there is a difference of more than six times in net debt. On the other hand, Synopsys has a lower multiple and still has the recovery card of Ansys Synergy. You can view them as two options with different characteristics.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"sources\">References<\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/0000883241\/000088324126000025\/snps-20260731.htm\" rel=\"nofollow noopener\" target=\"_blank\">Synopsys Fiscal Year 3, Q3 2026 10-Q (SEC EDGAR)<\/a><\/li><li><a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/0000883241\/000119312526368620\/d157153dex991.htm\" rel=\"nofollow noopener\" target=\"_blank\">Synopsys Q3 Earnings Press Release Attached 8-K (SEC EDGAR)<\/a><\/li><li><a href=\"https:\/\/investor.synopsys.com\/\" rel=\"nofollow noopener\" target=\"_blank\">Synopsys Investor Relations (IR) Page<\/a><\/li><li><a href=\"https:\/\/stockanalysis.com\/stocks\/snps\/forecast\/\" rel=\"nofollow noopener\" target=\"_blank\">SNPS Analyst Target Price Consensus (stockanalysis.com)<\/a><\/li><\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\"><em>During the writing process, I gathered data and created a draft using AI research tools, and then personally verified the numbers and logic before posting. Stock price, exchange rate, and earnings estimates are based on data as of September 8, 2026, so they may change thereafter. This post is for informational purposes only and does not recommend the trading of any specific stocks. Please remember that investment decisions and their consequences are solely the responsibility of the investor.<\/em><\/p>","protected":false},"excerpt":{"rendered":"<p>Synopsys (SNPS) announced on August 26 that revenue for the third quarter of fiscal 2026 was $2.4768 billion (approx. 3.33 trillion KRW), an increase of 42.41 TP3T, and non-GAAP EPS of $3.91 exceeded expectations. The stock price surged 13.41 TP3T the following day but gave back all of it within six trading days. Core EDA growth excluding Ansys is 8.51 TP3T. My 12-month baseline target price is $420 (approx. 564,060 KRW), and my rating is Hold.<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[62,152],"tags":[196,50,5,195,207,55],"class_list":["post-565","post","type-post","status-publish","format-standard","hentry","category-ai-datacenter","category-us-stock-analysis","tag-snps","tag-50","tag-5","tag-synopsys","tag-earnings-report","tag-stock-analysis"],"_links":{"self":[{"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/posts\/565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/comments?post=565"}],"version-history":[{"count":1,"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/posts\/565\/revisions"}],"predecessor-version":[{"id":566,"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/posts\/565\/revisions\/566"}],"wp:attachment":[{"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/media?parent=565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/categories?post=565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/andyguy.com\/en\/wp-json\/wp\/v2\/tags?post=565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}