Synopsys SNPS

Technology · Software - Infrastructure · Synthos Deep Dive · 2026-08-04

$442.61

Watch

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The Overview

Every advanced computer chip in the world is designed using software, and essentially all of it comes from two companies: Synopsys and Cadence. That is about as good a competitive position as exists in technology.

In May, Synopsys raised its forecasts for the year — for sales, profit margin, profit per share and cash generation, all four at once. Its most recent quarter beat its own guidance.

And the shares are down 35% over the past year, while the stock market is up 24%. They are 36% below their high and trading below both their three-month and their twelve-month average prices. Almost every other company in this research batch is at or near a record.

So why the fall? Last year Synopsys bought a company called Ansys for about $35 billion. To pay for it, its debt went from $684 million to $14.3 billion in twelve months. The accounting value of everything it now owns is largely goodwill — the premium it paid — so if you subtract that, the company's tangible net worth is negative, by about $43 per share. Its profit before tax barely covers its interest bill on the standard accounting measure. And it pays no dividend and buys back no stock, so an owner is paid nothing while waiting.

There is also a political risk the company writes into its own forecast: the guidance holds only if there are no further US export-control changes affecting sales to China.

In May, the activist investor Elliott Management took a seat on the board.

At $403.75 the shares cost about 27 times the profit management itself expects this year and about 23 times what analysts expect next year. Companies like this have usually cost more than 35 times. Analysts' average price target is $557 — 38% above the price — and, unusually, their lowest target of $455 is still 13% above it. Not one of the twenty-nine analysts covering it thinks the stock goes down.

Our estimate of fair value is $468, about 16% above the price, with roughly twice as much upside as downside.

That is the most attractive arithmetic in this batch of twelve. We are still calling it Watch rather than Buy, and we say why: an owner earns nothing while waiting, the balance sheet has no tangible asset behind it, and a $35 billion integration is still in progress. Results come on 26 August and management has scheduled an investor day on 30 September to explain its long-term plan — which is exactly the event that would resolve this.

Downside Risk 7/10. A great business on a balance sheet with negative tangible worth and no yield.
Growth Quality 7/10. 37% revenue growth this year, most of it bought; 17-19% earnings growth expected after.
Exponential Potential 7/10. The highest here. If artificial-intelligence agents multiply the number of chip designers, this is a per-seat licence business attached to that curve.

Putting a number on it: our fair-value estimate is $468 against a current price of $442.61 — real upside if our numbers are right.

Our summary metrics

Downside Risk (lower = safer)7/10High

"Rated 7 — a superb business on a balance sheet transformed beyond recognition in twelve months, with zero shareholder yield and an export-control caveat written into its own guidance. The transformation is arithmetic: total assets went from $13,074 million (FY2024) to $48,224 million (FY2025); goodwill from $3,449 million to $26,899 million; other intangibles from $195 million to $12,680 million; total debt from $684 million to $14,293 million; and net debt from MINUS $3,212 million — i.e. net cash — to PLUS $10,524 million on filed figures. `acquisitionsNet` for fiscal 2025 reads MINUS $15,890 million. Goodwill and intangibles of $39,579 million now exceed total equity of $28,328 million, so TANGIBLE book value is MINUS $43.32 per share, approximately MINUS $8.3 billion. GAAP interest coverage is 1.14x, with interest expense of $446.7 million in fiscal 2025 running toward roughly $530 million annualised on the June quarter, against guided non-GAAP interest and other expense of $485-495 million for fiscal 2026. GAAP earnings per share in the June quarter were $0.09 against $2.24 a year earlier. There is NO dividend and NO share repurchase — `commonStockRepurchased` and `commonDividendsPaid` both read zero in fiscal 2025 and fiscal 2024 — so the total shareholder yield is exactly zero, against roughly 4% to 9% for every other name in this batch. And the company's own guidance is conditioned on 'no further export-control/Entity List changes', which is an explicit statement that a material part of the forecast is outside management's control. Against all of that: revenue is overwhelmingly recurring, the market is a duopoly, and management RAISED every element of guidance in May."

Growth Quality7/10High

"Rated 7 — very strong reported growth of which roughly two-thirds is acquired, on an organic base that is nonetheless compounding at a good rate. Revenue: $6,127 million (FY2024), $7,054 million (FY2025, +15.1%), and management now guides fiscal 2026 to $9,625-9,705 million, midpoint $9,665 million, PLUS 37.0%. The guidance footnote decomposes it honestly: fiscal-2026 revenue 'includes $2.96 billion of expected Ansys revenue (including $60 million related to an accounting impact for Ansys channel partners), and reflects the impact of approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the expected divestiture of the Processor IP Solutions business.' Strip Ansys and the organic base is roughly $6.7 billion — a modest decline on fiscal 2025 once the divestitures are accounted for, which is the honest reading and the reason this is a 7 and not a 9. The June quarter was $2,276 million against $1,604 million, PLUS 41.9%, and beat guidance. Forward, consensus has revenue at $10,738 million (2027) and $12,013 million (2028) — PLUS 11.1% and PLUS 11.9% — and non-GAAP EPS at $14.785 (2026), $17.326 (2027) and $20.541 (2028), growth of 17.2% and 18.6%. The FY2027 EPS estimate range is only 9.4% wide on 15 analysts, which for a company mid-integration is unusually tight and suggests the near-term path is well understood. What the market is disputing is not the next two years; it is the multiple."

Exponential Potential7/10High

"Rated 7 — the highest exponential score in this batch, and it rests on a specific, independently-argued mechanism rather than on a product. Electronic design automation is a two-firm market. Every advanced chip designed anywhere is designed on Synopsys or Cadence software, the tools are licensed per seat and per compute-hour, and switching costs are close to prohibitive because designs, methodologies and engineers are all trained on one stack. The knowledge base's argument, made repeatedly at conviction 78-80, is that agentic artificial intelligence does not commoditise this — it multiplies it: 'exponentially growing agents will use tools, so instances of EDA/software tools skyrocket', and 'agentic AI lifts the number of ASIC designers ~1000x, so EDA tool-use and license consumption will skyrocket'. If that mechanism is even directionally right, a per-seat licensing model attached to an exponentially growing population of designers is one of the few genuinely non-linear revenue structures in software. Management makes the same argument in its own words — 'AI is scaling semiconductor demand, complexity and architectural diversity, driving demand across the portfolio' (half-weighted). Layered on top, the $35 billion Ansys acquisition adds simulation and analysis, giving what the company calls a 'silicon-to-systems' position that neither competitor holds. The score is 7 rather than 9 because the mechanism is asserted rather than measured — nothing in the filings quantifies AI-driven seat growth — because the same technology could in principle reduce the number of licensed humans rather than increase it, and because the exponential case sits on a balance sheet with negative tangible equity and 1.14x GAAP interest coverage."

Fair value$468 $266–$655

What does “fair value” mean?

Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.

The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.

What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)

Buy — CoreOwn it as a foundation — start or add now, size it for years, let dips be gifts.

Buy — TacticalGood price + confirmed trend + a defined exit — buy the setup, not a marriage.

WatchWe want the business, just not at this price/setup — act only when the listed trigger hits.

HoldFine to keep if you own it — no reason to buy more; new money does better elsewhere.

AvoidDon't own it — the problem is the business or the expectations, so a cheaper price won't fix it.

The Road Ahead

What we expect to matter in each window, and the evidence that would prove us wrong.

Short term 0-6 months

Neutral

Driver: "The only genuinely de-rated, non-overbought entry in this batch, twenty-two days before earnings. Synopsys closed 2026-08-04 at $403.75, UP 2.98% from $392.07 — the largest single-day move in this batch — having traded $394.485 to $404.295 on 1.32 million shares. That is 36.5% BELOW a 52-week high of $636.02 and only 8.5% above a low of $372.33, 8.6% BELOW a 50-day moving average of $441.95 and 10.1% BELOW a 200-day average of $449.05. RSI is 42.2 — the only sub-50 reading in this batch — and MACD is MINUS 15.97, the only negative reading. The trailing-year maximum drawdown is MINUS 37.4%. Relative performance is 3-month MINUS 18.8% against SPY plus 7.6%, 6-month MINUS 11.8% against plus 11.1%, and 12-month MINUS 34.7% against plus 24.3% — a fifty-nine point deficit, the worst in this batch by a wide margin. Against that: management RAISED full-year guidance on revenue, operating margin, EPS and free cash flow on 2026-05-27, the June quarter beat its own guidance on both revenue and non-GAAP EPS, and the consensus sits precisely at the guidance midpoint. The street's LOW price target of $455 is 12.7% ABOVE the current price — no covering analyst sees downside from here, which is the mirror image of the configuration on two other names in this batch."
What we’re watching: "The 2026-08-26 print against a consensus non-GAAP EPS of $3.67 and management's guided $3.63-$3.69 on revenue of $2,410-2,460 million — a narrow range, so the surprise if any will be in the guidance rather than the quarter. Then the 2026-09-30 INVESTOR DAY, at which management has said it will set long-term financial targets; for a stock that has de-rated 36.5% on multiple rather than on earnings, a credible long-term framework is precisely the catalyst that would close the gap. Inside the quarter, watch: any change to the export-control caveat, since the entire guidance is conditioned on 'no further export-control/Entity List changes'; Ansys synergy realisation, which management credits for the margin raise; the closing of the Processor IP Solutions divestiture; Design IP restructuring; free cash flow against the guided approximately $2.0 billion; and any first announcement of an actual share repurchase, which would be the single clearest signal available."
Confidence: Medium

Medium term 6-24 months

Tailwind

Driver: "The medium-term case is the strongest in this batch on arithmetic and the weakest on balance-sheet comfort. Consensus has non-GAAP EPS at $14.785 (fiscal 2026), $17.326 (2027) and $20.541 (2028) — PLUS 17.2% then PLUS 18.6% — on revenue of $9,682 million, $10,738 million and $12,013 million. At $403.75 that is 27.3x, 23.3x and 19.7x. Electronic design automation has traded above 35x forward earnings for most of the last decade, so the current multiple is a genuine de-rating rather than a normalisation, and the FY2027 estimate range of $16.61 to $18.18 — 9.4% wide on 15 analysts — says the near-term path is not what is in dispute. Free cash flow is guided to approximately $2.0 billion for fiscal 2026 on operating cash flow of approximately $2.3 billion and capital expenditure of approximately $300 million; at the current market value that is a 2.59% yield, which is thin and which improves quickly if the EPS path holds. The counterweight is the debt. Total debt of $14,293 million against a company that carried $684 million a year earlier, financing a $35 billion acquisition, with GAAP interest coverage of 1.14x and no shareholder return of any kind. Deleveraging is the medium-term job, and until it happens the equity carries the whole of the operating risk with none of the yield."
What we’re watching: "Whether Ansys synergies are quantified and delivered — management credits them for the raised margin guidance without sizing them. Whether debt falls; $14,293 million against roughly $2.0 billion of annual free cash flow is a seven-year repayment at full allocation, and no repurchase can begin in earnest until it does. Whether the promised share repurchase actually starts. Whether the export-control caveat resolves; the guidance is explicitly conditioned on it. Whether the Investor Day on 2026-09-30 produces long-term targets credible enough to re-rate a stock that has lost more than a third of its value. Whether organic growth — roughly $6.7 billion of the guided $9.665 billion, before divestitures — accelerates with the artificial-intelligence design cycle the knowledge base describes. And what Elliott Investment Management does from its board seat; activist involvement at a company with negative tangible equity and no buyback usually means one of divestiture, leverage reduction or capital return, and the cooperation agreement's standstill runs to at least 2027-05-26."
Confidence: Medium

Long term 2+ years

Tailwind

Driver: "Long run, this is one of the best business models in technology attached to one of the most reliable demand curves. Two companies supply the software on which every advanced semiconductor in the world is designed; the licences are recurring, the switching costs are prohibitive, and the customer base is the most capital-intensive industry on earth in the middle of the largest capacity build in its history. The structural argument in the knowledge base is that artificial intelligence multiplies this rather than threatening it — that agents using design tools expand the number of effective designers by orders of magnitude and that licence consumption expands with them. That argument is made three times, at conviction 78 to 80, by the chief executive of the company whose chips those designs run on; it is promoter-class and it is also the single most informed available view of what happens to design-tool demand. On top of it, Ansys adds simulation and analysis and gives Synopsys a position from silicon through to complete systems that neither competitor holds. The long-run risks are two and both are real. Export controls could permanently remove a large market — the company's own guidance carves it out. And a business whose growth depends on a customer base of roughly a dozen leading-edge chip designers is concentrated in a way the revenue line does not reveal."
What we’re watching: "Whether the agentic-AI thesis shows up in reported seat and licence growth rather than remaining an assertion. Whether Synopsys and Cadence remain a duopoly, or whether Siemens EDA or an artificial-intelligence-native entrant changes the structure. Whether the Ansys combination produces revenue neither company could have earned alone — 'joint silicon-to-systems solutions' is management's phrase and it is currently unquantified. Whether goodwill of $26,899 million and intangibles of $12,679 million survive without impairment; together they are 82% of total assets. Whether export controls on China are tightened, relaxed, or made permanent. Whether the balance sheet returns to net cash. And whether Sassine Ghazi's team, having spent $35 billion, resists spending more before the debt is repaid."
Confidence: Medium

Exponential Potential

Exponential Potential7/10High

“In software buy the expensive names (security, Cadence, Synopsys, CrowdStrike, Palo Alto) not cheap ones — cheap means higher disruption risk; fast-growers lead the rebound.”

Compound And Friendsconviction 60

What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.

Deeper analysis

Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.

Check our number Market-implied growth ≈ 27%/yr This isn’t how we calculate fair value — it’s public math you can verify yourself. To justify today’s $443, earnings would have to compound roughly 27% a year for 10 years (9% discount rate). Analysts forecast ~15%/yr, so the market is pricing in MORE than what the Street expects.

⚠ Earnings banner

Synopsys reports third-quarter fiscal 2026 results on 2026-08-26 — twenty-two days after this dive. Management's own guidance is revenue of $2,410-2,460 million and non-GAAP EPS of $3.63-$3.69; vendor consensus is $2,437.7 million and $3.67, i.e. precisely the midpoint of both ranges. A second, unusual catalyst follows five weeks later: an INVESTOR DAY on 2026-09-30, at which management has said it will "provide additional detail regarding the company's long-term financial targets and strategy." For a stock that has de-rated 36.5% on multiple rather than on earnings, the Investor Day is arguably the more important of the two events, and it is why the verdict below carries a dated trigger rather than a price alone.

Reference table

Street consensus	$557 (+38.0%) · median $554 · high $633 (+56.8%) · low $455 — 12.7% ABOVE spot · 24 buy / 4 hold / 1 sell across 29 analysts. No covering analyst sees downside
Valuation	27.3x FY2026E non-GAAP (= management's own guided $14.76 midpoint) · 23.3x FY2027E · 19.7x FY2028E · 91.3x trailing GAAP — an Ansys purchase-accounting artefact · EV/FY2026E revenue 9.1x
Guidance RAISED 2026-05-27, absent from the payload	Full-year revenue $9,625-9,705M (midpoint $9,665M, from $9,610M) · non-GAAP EPS $14.72-14.80 (midpoint $14.76) · GAAP EPS $2.49-2.91 · operating cash flow ~$2,300M, free cash flow ~$2,000M, capex ~$300M · non-GAAP tax rate 18.0% through FY2028
The Ansys balance sheet, one year on	Total assets $13,074M → $48,224M · goodwill $3,449M → $26,899M · intangibles $195M → $12,680M · total debt $684M → $14,293M · net debt −$3,212M → +$10,524M (filed basis) · `acquisitionsNet` −$15,890M
The line that stops a reader	Tangible book value −$43.32 per share — goodwill and intangibles of $39,579M against equity of $28,328M. GAAP EPS in the June quarter: $0.09, against $2.24 a year earlier
Shareholder yield	ZERO. No dividend. `commonStockRepurchased` reads $0 in fiscal 2025 AND fiscal 2024. Management says it "continues to plan stock repurchases" (half-weighted)
Corporate actions absent from the payload	Elliott Investment Management cooperation agreement dated 2026-05-26 — a board seat for Mr. Cohn, a standstill capping Elliott at 4.9% beneficial ownership / 7.5% economic exposure, running to at least 2027-05-26 · pending sale of the Processor IP Solutions business · Design IP restructuring · divestiture of Optical Solutions Group and PowerArtist RTL
Conviction	Positive-moderate — the strongest lane in this batch. 3 independent name-level claims, all bullish, including two at conviction 80 on agentic AI multiplying EDA licence consumption. 10 further claims are management voice at skill 0.5, excluded from the pool
Technicals	−36.5% from the 52-week high of $636.02, +8.5% above the low of $372.33; −8.6% BELOW the 50-DMA, −10.1% BELOW the 200-DMA; RSI 42.2 — the only sub-50 reading here; MACD −15.97 — the only negative; 12-month −34.7% vs SPY +24.3%

What the experts actually said 15 traceable claims on SNPS · showing the highest-conviction voices

“Cadence and Synopsys are part of the AI thematic portfolio as software-design names; plans to talk about them soon because there's been some developments.”

Jordi Visserbullishconviction 552026-08-09jordi_visser_ai-HFEex-dRjNs:baedd309cf

“Software-licensing firms like Cadence, Synopsys, Siemens will grow much larger as they add specialized token rental to their business models.”

Jensen Huangbullishconviction 802026-03-18jensen_huang-xv7UVAfyebk:5537104b3a

“In software buy the expensive names (security, Cadence, Synopsys, CrowdStrike, Palo Alto) not cheap ones — cheap means higher disruption risk; fast-growers lead the rebound.”

Compound And Friendsbullishconviction 602026-04-24

“Raising full-year FY2026 targets for revenue, operating margin, EPS, and free cash flow, driven by greater efficiency across the business.”

SNPS managementmanagementconviction 852026-05-27SNPS-earnings-2026Q2:f8a912a2a8

“Expects to complete the pending sale of its Processor IP Solutions business.”

SNPS managementmanagementconviction 622026-05-27SNPS-earnings-2026Q2:939078bb46

Every claim reconciles to a real claim_id in the Synthos knowledge base — this is the evidence the verdict is built on, not vibes. Management (the company itself) is shown but half-weighted; one cautionary voice is included on purpose.

Price & moving averages 12 months · 50 & 200-day averages · 52-week range

Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.

Bollinger Bands 20-day average ± 2 standard deviations

The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.

RSI (14) momentum gauge · 0–100

Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 61.

MACD 12 / 26 / 9 · trend & momentum

The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.

Relative performance vs S&P 500 & its sector (XLK (sector)), set to 100 a year ago

Solid = SNPS · dashed = S&P 500 · dotted = XLK (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.

Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate

Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.

Key stats an RIA wants

Price$442.61

Market cap$85B

P/E trailing79×

P/E FY26E / FY27E30× / 26×

EV / Sales9.8×

EV / EBITDA26.0×

Gross margin72.4%

Net margin11.4%

Dividend yield0.00%

Beta1.213

52-wk range$372 – $612

RSI(14)62

50 / 200-DMA$417 / $447

12-mo return+-27% (SPY +19%)

Street target$554 ($450–$633)

Analyst grades24 Buy · 4 Hold · 1 Sell

FMP ratingB

Next earnings2026-08-26 (Q3 fiscal 2026 earnings, 22 days away; vendor consensus non-GAAP EPS $3.67 against management's guided range of $3.63-$3.69, on revenue of $2,437,663,000 against a guided $2,410-2,460 million. Then a second, unusually specific one — management has announced an INVESTOR DAY on 2026-09-30 at which it will 'provide additional detail regarding the company's long-term financial targets and strategy'.)

1. The business and the transformation

Synopsys reports two segments — Design Automation (advanced silicon design and verification) and Design IP. Chief executive Sassine Ghazi; chief financial officer Shelagh Glaser; approximately 28,000 employees; NASDAQ.

The Ansys acquisition changed the company's financial shape completely in one year:

($M)	FY2024 (2024-10-31)	FY2025 (2025-10-31)	change
Revenue	6,127	7,054	+15.1%
Total assets	13,074	48,224	+269%
Goodwill	3,449	26,899	+680%
Other intangible assets	195	12,680	+6,397%
Cash and equivalents	3,897	2,888	−25.9%
Total debt (payload basis)	684	14,293	+1,989%
Net debt (payload basis)	−3,212 (net CASH)	+11,405	—
Total stockholders' equity	8,991	28,328	+215%
`acquisitionsNet`	(157)	(15,890)	—
Diluted shares (weighted average, M)	155.9	161.7	—
GAAP diluted EPS	$14.51	$8.04	−44.6%

Read the last row against the third: revenue rose 15.1% and GAAP earnings per share FELL 44.6%, because the acquisition brought $12.7 billion of amortisable intangibles and $14.3 billion of debt. That divergence is the entire reason the trailing price-to-earnings ratio in this file reads 91.3x, and it is why every forward figure in this dive is on the non-GAAP basis management guides to.

Rebuilding the debt on filed components: short-term debt $22.1M plus long-term debt $13,462.4M = $13,484.5M of actual borrowings; cash $2,888.0M plus short-term investments $72.9M = $2,960.9M. Net debt is therefore $10,523.6 million, not the payload's $11,405.4 million — the $881.8 million difference being $808.9 million of lease obligations added to debt plus $72.9 million of short-term investments omitted from cash, which sums exactly. Section 6 has the detail.

Tangible equity is deeply negative. Goodwill $26,899.2M plus other intangibles $12,679.6M = $39,578.8M against total equity of $28,327.6M — approximately MINUS $11,251 million, and the vendor's tangibleBookValuePerShareTTM of −$43.32 is correct rather than defective.

2. The June quarter and the raised guidance

From the 8-K earnings release filed 2026-05-27:

> "Synopsys delivered a strong second quarter with solid execution and strength across the business... AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power—driving demand across our portfolio." — Sassine Ghazi

> "Second quarter revenue and non-GAAP EPS exceeded guidance. Our continued focus on execution and financial discipline sets us up for a strong second half. We are raising our targets for revenue, operating margin, EPS, and free cash flow for the year, as we drive greater efficiency across the business." — Shelagh Glaser

Q2 fiscal 2026 (quarter ended 2026-04-30)	2026	2025	change
Revenue	$2,275,985k	$1,604,266k	+41.9%
Gross profit (payload)	$1,646,135k	—	—
Operating income (payload)	$236,320k	—	—
GAAP net income	$17.1M	$349.2M	−95.1%
GAAP diluted EPS	$0.09	$2.24	−96.0%
Non-GAAP diluted EPS	$3.35	—	above guidance
versus consensus	$3.15	—	*+6.3% beat*
Interest expense (payload)	$133,364k	—	—
Diluted shares (payload)	191,580k	—	—

A $3.26 per share gap between GAAP and non-GAAP earnings in a single quarter. That is acquisition amortisation, integration and restructuring costs, and stock-based compensation. Reported GAAP profitability is close to nil while the company guides to $14.76 of non-GAAP earnings for the year, and both figures are true.

The raised full-year targets, filed:

Fiscal year ending 2026-10-31	Low	High	Midpoint
Revenue	$9,625M	$9,705M	$9,665M (raised from $9,610M)
GAAP expenses	$8,469M	$8,599M	—
Non-GAAP expenses	$5,675M	$5,725M	—
Non-GAAP interest and other, net	($495M)	($485M)	—
Non-GAAP tax rate	18%	18%	—
Fully diluted shares	192M	194M	—
GAAP EPS	$2.49	$2.91	$2.70
Non-GAAP EPS	$14.72	$14.80	$14.76
Operating cash flow	—	—	~$2,300M
Free cash flow	—	—	~$2,000M
Capital expenditures	—	—	~$300M

And the revenue raise is decomposed honestly by the company itself:

($M)	Prior midpoint	Business performance	Ansys channel accounting	Processor IP divestiture	New midpoint
Revenue	9,610	+35	+60	(40)	9,665

Note what that table says: of the $55 million raise, only $35 million is business performance; $60 million is an accounting reclassification for Ansys channel partners which management describes as EPS-neutral, and $40 million is removed for a divestiture. The company disclosed this rather than presenting a $55 million beat, and it deserves credit for it. The margin and EPS raise is separate and is attributed to "strong cost discipline and accelerating synergies."

The guidance footnote also sizes the acquisition and the divestitures: fiscal-2026 revenue "includes $2.96 billion of expected Ansys revenue (including $60 million related to an accounting impact for Ansys channel partners), and reflects the impact of approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the expected divestiture of the Processor IP Solutions business." So the organic base outside Ansys is roughly $6.7 billion against a fiscal-2025 total of $7.05 billion — and once the $150 million of divestitures is added back, roughly flat to modestly up. That is the honest read on organic growth and it is why the growth score is 7 rather than 9.

The critical caveat is management's own: the targets are provided "assuming no further export-control/Entity List changes." A material part of this forecast is a political variable the company does not control, and the company says so.

3. The Elliott cooperation agreement — 2026-05-26

From the 8-K filed 2026-05-27:

Synopsys entered a Cooperation Agreement with Elliott Investment Management L.P., Elliott Associates, L.P. and Elliott International, L.P., dated 2026-05-26, under which Mr. Cohn was appointed to the Board and determined to qualify as an independent director. The agreement provides that if he ceases to serve, "Synopsys and Elliott will cooperate in good faith to mutually select a substitute director... provided that at such time Elliott beneficially owns a 'net-long position' of, or has aggregate net-long economic exposure to, at least 1.5% of Synopsys' then-outstanding common stock."

It further includes "certain voting commitments, customary standstill restrictions and mutual non-disparagement provisions, including that Elliott will not acquire in excess of 4.9% beneficial ownership of or 7.5% aggregate economic exposure to Synopsys' outstanding common stock, during the Cooperation Period." The standstill runs to the later of 2027-05-26 or ten days after Mr. Cohn leaves the board.

None of this appears in the vendor payload. The reading is genuinely two-sided. Activist involvement at a company with negative tangible equity, $14.3 billion of debt and zero capital return usually presages one of three things: divestiture, deleveraging, or the initiation of a buyback. Two of those three are already visible — the Processor IP Solutions sale is pending, the Optical Solutions Group and PowerArtist RTL have gone, Design IP is being restructured, and management says it "continues to plan stock repurchases." Whether Elliott caused those or arrived because of them is not determinable from this archive, and the dive does not speculate.

4. Cash generation

($M)	FY2024	FY2025	FY2026 guided
Operating cash flow	1,407.0	1,518.6	~2,300
Capital expenditure	(123.2)	(169.5)	~(300)
= Free cash flow	1,283.9	1,349.2	~2,000
Yield on $77.31bn market cap	—	1.75%	2.59%
Repurchases	$0	$0	—
Dividends	$0	$0	—

capitalExpenditure and investmentsInPropertyPlantAndEquipment are identical in both years and both are low relative to revenue — 2.4% in fiscal 2025 — which is what an asset-light software business should look like. No filed capital-expenditure line was located in the extracted quarterly text to verify against, so this is recorded as internally consistent rather than filing-verified; the fiscal-2026 guided figure of approximately $300 million comes directly from the earnings release and represents a 77% increase.

The line that matters most in this table is the last two. Synopsys returned nothing to shareholders in fiscal 2024 and nothing in fiscal 2025. Against roughly $2.0 billion of guided free cash flow and $14.3 billion of debt, the entire cash flow has a claim on it before any shareholder does, and that is the single sharpest difference between this name and every other in this batch.

5. Valuation — priced in or room?

At $403.75 (market capitalisation $77.31B; 191,562 thousand shares outstanding at the 2026-02-17 record date; management guides 192-194 million fully diluted):

	Trailing	FY2026E	FY2027E	FY2028E
Consensus non-GAAP EPS	$13.37 (four filed quarters)	$14.785 (15)	$17.326 (15)	$20.541 (9)
Management guidance	—	$14.72–$14.80	—	—
EPS growth	—	+15.2% (on FY2025's $12.83)	+17.2%	+18.6%
P/E	30.2x	27.3x	23.3x	19.7x
Consensus EPS range	—	$14.404–$14.945 (3.8%)	$16.611–$18.182 (9.4%)	$13.995–$33.723 (141%)
Consensus revenue ($M)	—	9,682 (18)	10,738 (18)	12,013 (14)
Revenue growth	—	+37.3%	+10.9%	+11.9%
Trailing GAAP P/E	91.3x — an artefact, not a valuation	—	—	—
Enterprise value (rebuilt)	$87.83bn	—	—	—
EV / consensus revenue	—	9.07x	8.18x	7.31x
Free cash flow yield (guided ~$2.0bn)	—	2.59%	—	—
Shareholder yield	ZERO	—	—	—

Estimate coverage is good on the two anchor years and collapses beyond. 15 analysts on FY2026 and FY2027 EPS, with FY2027 spanning $16.61 to $18.18 — a 9.4% range, which for a company mid-integration is unusually tight and says the market is not arguing about the next two years. FY2028 rests on 9 analysts with a range of $13.99 to $33.72 — 141% — and is used only as a directional cross-check.

est.ebitdaAvg and est.ebitAvg are rejected. In every year from fiscal 2024 to fiscal 2029 ebitdaAvg is exactly 29.5578% of revenueAvg and ebitAvg exactly 23.8342%, to four decimal places; the fiscal 2022 and 2023 rows carry different fixed pairs (24.2471%/19.2358% and 23.2525%/18.4467%), confirming the forward block is synthesised in tranches rather than collected. The implied 23.83% EBIT margin sits far above the GAAP operating margin of 8.36% and below the non-GAAP margin management guides to, so it corresponds to neither published basis. All forward valuation uses epsAvg only.

Enterprise value is rebuilt rather than taken. The rebuild uses filed borrowings of $13,484.5M less cash and short-term investments of $2,960.9M, giving net debt of $10,523.6M and an enterprise value of $87,833.4M — 8.1% above market capitalisation. netDebtToEBITDATTM and the payload's netDebt of $11,405.4M are rejected (Section 6).

5a. What today's price assumes (the inversion)

At $403.75 — 27.3x management's own guided fiscal-2026 figure and 23.3x the 2027 consensus — the price embeds roughly:

Non-GAAP EPS of $14.76 in fiscal 2026 and $17.33 in fiscal 2027. (Management guidance and consensus; the two coincide almost exactly for 2026.) The August quarter is guided at $3.63-$3.69 against a consensus of $3.67. The 17.2% step to 2027 requires the Ansys synergies management credits for the current-year margin raise to keep accruing.
Export controls do not worsen. (Company guidance caveat, verbatim.) This is the most fragile assumption in the price, and it is fragile precisely because it is unquantified: the company states the targets assume "no further export-control/Entity List changes" without sizing the exposure. Nothing in this archive lets a reader put a number on it, and this dive does not invent one.
The Ansys integration delivers and the debt comes down. (Our derivation.) $14,293 million of debt against roughly $2.0 billion of guided free cash flow is a seven-year repayment at full allocation. The price assumes deleveraging proceeds without a capital raise and without an impairment of $39,579 million of goodwill and intangibles.
The market eventually pays more than 23x for a duopoly software business. (Our number.) Electronic design automation has traded above 35x forward earnings for most of the last decade. At 20x FY2027E the stock is $347; at 30x it is $520; at 35x it is $606. The multiple, not the earnings, is the entire debate — which is unusual and which makes the Investor Day on 2026-09-30 an unusually high-leverage event.
A shareholder is paid nothing to wait. (Filed.) No dividend, no repurchase in two consecutive fiscal years. The price assumes the total return comes from earnings growth and multiple recovery alone.

5b. The return bridge (why the multiple moves)

Expected return over the next twelve months decomposes as non-GAAP EPS growth (+17.2%, from FY2026E $14.785 to FY2027E $17.326) + multiple drift + shareholder yield (ZERO).

Our base assumes the multiple EXPANDS, from today's 23.3x on the fiscal-2027 year to 27.0x — a 16% re-rating — and that is unambiguously the fragile leg, named as such. The mechanism is the reversal of a de-rating that has already removed 36.5% from the price against a business whose guidance was raised. We are not assuming Synopsys returns to 35x; we are assuming it recovers roughly a third of the gap between 23x and its own decade-long range.

At an unchanged 23.3x, fair value on the fiscal-2027 consensus is $404 — spot exactly — and the twelve-month return is 17.2% of earnings growth and nothing else, because there is no yield. That floor case is still a 17% return, which is the strongest floor in this batch. What it lacks is any cushion beneath it: with zero yield, if the multiple falls instead of rising, the holder has nothing.

Sensitivity: on the FY2027E consensus mean of $17.326, 16x = $277, 20x = $347, 23.3x = $404 (spot), 27x = $468, 30x = $520, 35x = $606.

5c. Variant perception (where we differ, what would surprise)

We are 16.0% BELOW the street and our disagreement is about the balance sheet, not the business. Our $468 against a consensus target of $557, using the street's own EPS. The street's LOW target of $455 is 12.7% ABOVE the current price — no covering analyst sees any downside from here — and we do: our bear case is $266. A twenty-nine-analyst community with zero downside cases on a stock that has fallen 34.7% in a year is a caution, not a comfort.
We think the zero shareholder yield is under-weighted in every bull case we can see. Every other name in this batch pays its owner between 2.3% and 9.1% a year to wait. Synopsys pays nothing, and will not until $14.3 billion of debt is materially reduced. Watchable event: the first announced share repurchase. Management says it "continues to plan" one; the filings record none in two fiscal years.
We think the knowledge base's agentic-AI mechanism is the most important structural argument in this batch and that it is unproven in any filing. Three claims at conviction 78-80 argue that design-tool licence consumption multiplies with agentic artificial intelligence. Nothing in Synopsys' disclosure quantifies seat growth, licence growth or AI-attributable revenue. Watchable event: the 2026-09-30 Investor Day, where long-term targets would be the first place such a mechanism would appear in a number.
We differ from the vendor data on leverage and on trailing earnings (Section 6): netDebt is $881.8 million too high by exactly the sum of lease obligations added and short-term investments omitted, and the trailing price-to-earnings ratio of 91.3x is an Ansys purchase-accounting artefact that would rank this name as one of the most expensive in the market on any screen.
Positive surprise that would force a re-rate: an Investor Day long-term framework with quantified Ansys synergies; the initiation of a buyback; the export-control caveat being removed from guidance; or the Processor IP Solutions sale closing at a disclosed and favourable price.
Negative surprise that would break the thesis: any tightening of export controls; a downward revision to the $14.72-$14.80 range; goodwill impairment against $39,579 million of goodwill and intangibles; a capital raise; or Elliott's board seat proving to be the beginning of a dispute rather than a settlement.

Synthos fair values

All three anchors are multiples of the fiscal-2027 consensus non-GAAP EPS distribution — mean $17.32592, low $16.61072, high $18.18214, 15 analysts — cross-checked against management's guided fiscal-2026 range and against enterprise value to revenue.

Bear ~$266 — 16.0x the FY2027 consensus LOW of $16.611. Cross-check: 18.5x FY2026E; 28.6% BELOW the 52-week low of $372.33; 6.2x EV/FY2027E revenue. The scenario: export controls tighten and remove a material market; Ansys synergies disappoint; the debt forces a capital raise or a goodwill impairment; and a software business with no yield and negative tangible equity re-rates to a hardware multiple. −34.1%.
Base ~$468 — 27.0x the FY2027 consensus MEAN of $17.326. Cross-check: 31.7x FY2026E; 22.8x FY2028E; 9.5x EV/FY2027E revenue. The scenario: guidance is met, Ansys synergies accrue as management describes, the export-control caveat stays benign, debt falls, and the multiple recovers roughly a third of the way toward the sector's decade-long range. +15.9%.
Bull ~$655 — 36.0x the FY2027 consensus HIGH of $18.182. Cross-check: 31.9x FY2028E; 3.0% above the 52-week high of $636.02; 3.5% above the street's high target of $633. The scenario: the agentic-AI thesis begins showing up in disclosed licence growth, the Investor Day sets a credible long-term framework, a buyback starts, and the market restores the historical duopoly multiple. +62.2%.

Base is 15.9% above spot; asymmetry roughly 1.82:1 to the upside (34.1% down, 62.2% up), with a shareholder yield of ZERO. On base return this clears the threshold this programme has used for a Tactical Buy. On payoff ratio and on yield it does not, and Section 8 states exactly how far short it falls rather than rounding it up.

6. Data integrity — what we rejected and why

Six findings. Synopsys' payload is arithmetically sound but describes a company whose accounting basis has been transformed, and it carries the standard leverage error.

1. netDebt is overstated by $881.8 million — REJECTED and rebuilt, with an exact decomposition. The payload reports fiscal-2025 totalDebt of $14,293,418k and netDebt of $11,405,388k. Filed components: shortTermDebt $22,117k plus longTermDebt $13,462,398k = $13,484,515k of borrowings, plus capitalLeaseObligations of $808,903k added on top. Cash of $2,888,030k is used without the $72,929k of short-term investments. $808,903k + $72,929k = $881,832k, and $11,405,388k − $881,832k = $10,523,556k, the correct net debt. Both documented defects — lease obligations folded into debt, and short-term investments omitted from cash — appear in the same field, and their sum reconciles to the dollar. Consequential rejections: netDebt, netDebtToEBITDATTM, debtToEquityRatioTTM (0.356x against a correct 0.476x on filed borrowings and equity — note this one is understated, not overstated, because the equity denominator is TTM and the debt numerator is fiscal-year-end), debtToAssetsRatioTTM and any enterprise-value figure derived from them. Rebuilt enterprise value: $77,309.8M + $10,523.6M = $87,833.4M.

2. priceToEarningsRatioTTM of 91.35x is an Ansys purchase-accounting artefact — REJECTED as a valuation input. Trailing GAAP earnings are depressed by roughly $12.7 billion of newly recognised intangibles being amortised and by interest on $14.3 billion of new debt. The June quarter's GAAP diluted EPS was $0.09 against $2.24 a year earlier; fiscal-2025 GAAP EPS was $8.04 against $14.51. Any screen ranking Synopsys on trailing earnings is ranking a purchase-accounting entry. Rejected with it: netProfitMarginTTM (8.91%), operatingProfitMarginTTM (8.36%), netIncomePerShareTTM ($4.06), effectiveTaxRateTTM (3.96%) and interestCoverageRatioTTM (1.139x) as measures of operating quality — though the last is reported prominently in this dive as a genuine GAAP fact about the balance sheet.

3. inc_q carries a stale share count in two of the last three quarters — partial-row corruption. weightedAverageShsOutDil reads 161,682,000 for both the fiscal-2025 fourth quarter and the fiscal-2026 first quarter — identical to the fiscal-2025 full-year figure — against 191,580,000 in the fiscal-2026 second quarter and management's guided 192-194 million fully diluted. The Ansys shares were issued in fiscal 2025, so a post-acquisition quarter carrying a pre-acquisition weighted-average count is wrong. Neighbouring fields in the same rows — revenue $2,408,798k for Q1 fiscal 2026, matching the earnings-release actual exactly — are correct. Check fields individually.

4. est.ebitdaAvg and est.ebitAvg carry the fixed-ratio fabrication signature in TRANCHES — REJECTED. From fiscal 2024 to fiscal 2029, ebitdaAvg is exactly 29.5578% of revenueAvg and ebitAvg exactly 23.8342%; fiscal 2023 carries a different fixed pair (23.2525% / 18.4467%) and fiscal 2022 another (24.2471% / 19.2358%). Three constant ratios applied to three blocks of years is not a forecast; it is a template applied at three different vintages. The implied 23.83% EBIT margin corresponds to neither the GAAP operating margin of 8.36% nor the non-GAAP margin management guides to. All forward valuation uses epsAvg only.

5. Two corporate actions and three divestitures are absent from every vendor field. The Elliott cooperation agreement of 2026-05-26 with a board seat and a 4.9%/7.5% standstill; the raised full-year guidance of 2026-05-27 on revenue, operating margin, EPS and free cash flow; the pending sale of the Processor IP Solutions business (approximately $40 million of fiscal-2026 revenue); the completed divestitures of the Optical Solutions Group and PowerArtist RTL (approximately $110 million); and the Design IP restructuring. bal_a and cf_a both end 2025-10-31 and there is no fiscal-2026 row anywhere.

6. minorityInterest reads MINUS $587,000 for fiscal 2025 against PLUS $32,504,000 for fiscal 2024 — noted, and immaterial. A non-controlling interest that swings from positive $32.5 million to negative $0.6 million in a year of acquisitions is plausible (a buy-out of a minority stake would do it) but is not verifiable from the extracted text. At 0.0008% of market capitalisation it changes nothing, and it is recorded only because the NCI field was checked.

Verified clean — recorded:

inc_q fiscal-2026 second-quarter revenue of $2,275,985k matches the earnings release EXACTLY ($2.276 billion), as does epsDiluted of $0.089 against a reported $0.09 and netIncome of $17,105k against $17.1 million.
inc_q fiscal-2026 first-quarter revenue of $2,408,798k matches the earn_cal actual exactly.
capitalExpenditure is IDENTICAL to investmentsInPropertyPlantAndEquipment in both fiscal 2025 (−$169,454k) and fiscal 2024 (−$123,161k) — no definition change, no sign error, and both figures are plausible at 2.4% and 2.0% of revenue for a software business. freeCashFlow reconciles: $1,518,608k − $169,454k = $1,349,154k, exactly as reported. No filed capital-expenditure line was located in the extracted text, so this is recorded as internally consistent rather than filing-verified.
acquisitionsNet of −$15,890,428k for fiscal 2025 is correctly signed and correctly sized against the Ansys transaction — which is more than the equivalent field managed on two other names in this programme.
tangibleBookValuePerShareTTM of −$43.32 is CORRECT rather than defective, and properly distinct from bookValuePerShareTTM of $159.97: goodwill of $26,899.2M plus intangibles of $12,679.6M genuinely exceeds equity of $28,327.6M. The identical-book defect was checked and does not apply.
The share count reconciles. Market capitalisation ÷ price gives 191,479,000; the 8-K states 191,561,935 shares outstanding at the 2026-02-17 record date; management guides 192-194 million fully diluted. Consistent to 0.04%.
dividendYieldTTM and dividendPerShareTTM both read ZERO, and that is CORRECT — Synopsys pays no dividend. Not a missing field.

Peer set — REJECTED as largely irrelevant, with one exception. The vendor peers are Autodesk, Cadence Design Systems, CoreWeave, Fortinet, Corning, Strategy Inc, Cloudflare, NetEase, Snowflake and TE Connectivity. Cadence is the correct comparable and it is the only one. The rest include a bitcoin treasury company, a Chinese gaming publisher, a glass manufacturer, a connector manufacturer and an artificial-intelligence cloud provider. Siemens EDA is not separately listed. No peer-multiple comparison is drawn.

Vendor composite rating — REJECTED. rating gives B− / 2 overall with 1 on price-to-earnings. That sub-score is computed on the 91.3x trailing GAAP multiple rejected in finding 2. The rating block is scoring an amortisation schedule.

Non-equity tripwire — checked and passed. SNPS is common stock, NASDAQ, with 191,561,935 shares outstanding at 2026-02-17 per the annual-meeting 8-K. Beta 1.222; no dividend; volume 1.32 million shares (~$532M of turnover); the 52-week band of $372.33 to $636.02 is a 71% range. This is common equity.

7. Knowledge base — the strongest positive lane in this batch, and a third of it is management

Raw hits: 49. Exact case-sensitive entity matches: 30. Independent name-level claims used: 3. Management-voice claims excluded from the pool: 10. Text-only: 19.

The sweep ran entity terms SNPS, Synopsys, Cadence, Ansys and CDNS, plus free text, across all 52,021 distilled claims.

The independent lane — three claims, all bullish, two at conviction 80

> 2026-04-15 · BULLISH · conviction 80 · thesis · entities: Synopsys, Cadence, Excel, PowerPoint · channel: jensen_huang · no named speaker

> "AI won't commoditize software tool-makers; exponentially growing agents will use tools, so instances of EDA/software tools skyrocket."

> 2026-03-18 · BULLISH · conviction 80 · thesis · entities: Cadence, CDNS, Synopsys, SNPS, Siemens · channel: jensen_huang · no named speaker

> 2026-04-24 · BULLISH · conviction 60 · principle · entities: CDNS, SNPS, CRWD, PANW · channel: compound_and_friends · speaker: Adam Parker · role: independent

> "In software buy the expensive names (security, Cadence, Synopsys, CrowdStrike, Palo Alto) not cheap ones — cheap means higher disruption risk; fast-growers lead the rebound."

And one claim quoted for MECHANISM but not counted, because its entity list names only Cadence:

> 2026-05-01 · bullish · conviction 78 · entities: CDNS · channel: jensen_huang · speaker: Jensen Huang

> "Agentic AI lifts the number of ASIC designers ~1000x, so EDA tool-use and license consumption will skyrocket — Cadence's TAM explodes as agents orchestrate its design tools."

Attribution discipline, stated explicitly. Three of the four claims above are on the jensen_huang channel and are promoter-class under the four-lane policy: the speaker is the chief executive of the company whose chips are designed with these tools and whose interest is served by an expanding design ecosystem. They are first-class as a statement of the MECHANISM — nobody has a better view of what agentic design will do to tool consumption — and low-weight as a conclusion about the equity. The 2026-05-01 claim names only CDNS and is therefore about Cadence; the mechanism is identical for both members of a two-firm market, but it is not counted as a Synopsys claim and the distinction is recorded rather than blurred.

The one genuinely independent, speaker-attributed name-level claim is Adam Parker's, and it is a portfolio-construction argument rather than a company analysis: buy the expensive software names because cheapness signals disruption risk. Applied to a stock that has fallen 34.7% in twelve months, that claim now points in an uncomfortable direction — Synopsys has become the cheap one — and this dive notes the tension rather than quoting the claim as straightforward support.

The management lane — ten claims at skill 0.5, excluded from the pool

Ten of the thirty entity matches come from SNPS_mgmt at skill 0.5, all dated 2026-05-27 from the second-quarter release. Excluded from the conviction pool per house rule and quoted at half weight. Their factual content is the best forward calendar available and appears nowhere in the payload:

"Raising full-year FY2026 targets for revenue, operating margin, EPS, and free cash flow, driven by greater efficiency across the business." (conviction 85)
"Provided Q3 and full-FY2026 consolidated financial targets (assuming no further export-control/Entity List changes); Q2 revenue and non-GAAP EPS exceeded guidance." (conviction 78)
"AI is scaling semiconductor demand, complexity and architectural diversity, driving demand across the portfolio — a foundation for sustained growth and margin expansion." (conviction 75)
"Expects Ansys integration to deliver synergies and enable joint silicon-to-systems solutions." (conviction 65)
"Will host Sept. 30, 2026 Investor Day to detail long-term financial targets and strategy." (conviction 68)
"Reallocating Design IP segment resources to higher-growth opportunities alongside planned restructuring activities." (conviction 60)
"Expects to complete the pending sale of its Processor IP Solutions business." (conviction 62)
"Transitioned to a normalized three-year non-GAAP tax rate of 18.0% through FY2028, reflecting Ansys and OBBB tax-law impacts." (conviction 58)
"Continues to plan stock repurchases as part of forward capital allocation." (conviction 52) — note that the filings record ZERO repurchases in fiscal 2025 and fiscal 2024.
"CFO: continued focus on execution and financial discipline sets Synopsys up for a strong second half." (conviction 72)

Conclusion. Breadth 3 independent sources, claim count 3 independent name-level claims, net conviction positive-moderate. This is the strongest positive knowledge-base lane in this batch, and it should be read with two qualifications: three-quarters of the high-conviction content is promoter-class from a single customer's chief executive, and the one independent claim is a factor argument that has been overtaken by the stock's own de-rating. The mechanism it describes — agentic artificial intelligence multiplying design-tool consumption — is the single most important structural argument encountered in this batch, and it is unquantified in any filing.

8. Technicals

Price $403.75, +2.98% — the largest daily move in this batch. 36.5% below the 52-week high of $636.02; only 8.5% above the low of $372.33. Position within the annual range: 12th percentile.
BELOW both moving averages: −8.6% against the 50-day of $441.95 and −10.1% against the 200-day of $449.05, with the 50-day below the 200-day. Along with one other name here, this is one of only two in the batch trading below its 200-day average, and the only one below both.
RSI 42.2 — the only sub-50 reading in this batch. MACD −15.97 — the only negative reading.
max_dd_from_peak reads −37.42% against pct_from_hi of −36.50%. These DIFFER, so on this name the field genuinely records a trailing-year maximum drawdown.
Relative performance: 3-month −18.8% against SPY +7.6%; 6-month −11.8% against +11.1%; 12-month −34.7% against SPY +24.3% and QQQ +30.8% — a fifty-nine point deficit against the index and a sixty-five point deficit against the technology index, the worst in this batch by a wide margin.
Sentiment: 24 buy, 4 hold, 1 sell across 29 analysts; consensus target $557 (+38.0%), median $554, high $633 (+56.8%), low $455 — 12.7% ABOVE spot. Not one of twenty-nine covering analysts has a target below the current price, on a stock that has fallen 34.7% in a year. That is the exact mirror image of the configuration on the property-casualty insurer in this batch, and it is a caution in both directions: the sell side has been wrong for a year and has not capitulated.

9. Insiders — one transaction, and it is an option exercise

Date	Person	Role	Type	Shares	Price	Held after
2026-06-15	Michael Ellow	Chief Revenue Officer	M-Exempt	4,048	$0	26,713

The entire insider file contains one transaction: a Chief Revenue Officer's option exercise on 2026-06-15, with no associated sale recorded.

There is no open-market sale and no open-market purchase in the window. The absence of selling on a stock 36.5% below its high is unremarkable; the absence of BUYING is the more interesting half, given management's own view that the guidance was raised and the second half will be strong. One M-Exempt line is not evidence of anything, and it is reported as a null file.

10. Verdict, kill-criteria and flip conditions

Watch — and this is the closest call in batch AA, named as such.

What clears. Base fair value $468 is 15.9% above spot, which is above the base-return threshold this programme has previously used to justify a Tactical Buy. The asymmetry is 1.82:1. The business is one half of a two-firm market supplying software that every advanced chip in the world is designed on. Management raised full-year guidance on revenue, operating margin, earnings per share and free cash flow simultaneously on 2026-05-27, and the June quarter beat its own guidance on both revenue and non-GAAP earnings. Consensus sits precisely at the guidance midpoint and the fiscal-2027 estimate range is only 9.4% wide. The entry is 36.5% below the 52-week high, below both moving averages, at an RSI of 42.2 — the only genuinely de-rated, non-overbought entry in this batch. The knowledge base supplies a specific structural mechanism at conviction 78-80. And the street's lowest target is 12.7% above the current price.

What does not clear, in four numbers.

First, the shareholder yield is ZERO. No dividend, and commonStockRepurchased reads $0 in fiscal 2025 and fiscal 2024. Every other name in this batch pays its owner between 2.3% and 9.1% a year to wait. The Tactical Buy this programme issued most recently rested half on a 7.4% shareholder yield; here there is none, and there cannot be one until a $14.3 billion debt load is materially reduced.

Second, the payoff ratio is 1.82:1 against the 2.46:1 of the last Buy issued. The base return clears; the ratio does not.

Third, the balance sheet has no tangible asset beneath it. Goodwill of $26,899 million and intangibles of $12,680 million against total equity of $28,328 million — tangible book value of MINUS $43.32 per share. GAAP interest coverage is 1.14x. GAAP earnings per share in the June quarter were $0.09. The equity carries the whole of the operating risk of a $35 billion integration.

Fourth, a material part of the forecast is a political variable the company excludes from its own guidance. The targets are given "assuming no further export-control/Entity List changes", and nothing in this archive sizes that exposure. This programme declined a Buy in the previous batch because a $6.25 billion acquisition six days old was unquantified; an unquantified regulatory carve-out inside the guidance itself is the same category of problem.

And one item that could be read either way and is reported as unresolved: Elliott Investment Management took a board seat on 2026-05-26 under a cooperation agreement with a standstill to at least 2027-05-26. Activist involvement at a company with negative tangible equity and no capital return is usually a catalyst; it is also, occasionally, a symptom.

Pre-registered UPGRADE conditions — what would take this to Buy — Tactical:

The 2026-09-30 Investor Day producing a credible long-term financial framework, particularly one that quantifies Ansys synergies or artificial-intelligence-driven licence growth. This is the primary trigger and it is fifty-seven days away.
The initiation of an actual share repurchase, converting a zero shareholder yield into a non-zero one — the single change that would most improve this case.
A price below approximately $360, which is 20.8x the fiscal-2027 consensus mean and would take asymmetry above 2.5:1 without any change to the estimates. That is 3.3% below the 52-week low.
The export-control caveat being removed from guidance, or the exposure being quantified.
Net debt below approximately $8 billion, from $10.5 billion on filed figures.

Pre-registered KILL criteria — what would take this to Hold or Avoid:

Any downward revision to the $14.72-$14.80 fiscal-2026 non-GAAP range, or a third-quarter print below the guided $3.63.
A tightening of export controls affecting semiconductor design software.
Goodwill or intangible impairment, against $39,579 million carried on a $48,224 million balance sheet — 82% of total assets.
A capital raise, or debt failing to decline through fiscal 2027.
Ansys synergies being deferred or reduced, having been credited for the current margin raise.
Elliott's cooperation agreement breaking down, or a proxy contest emerging.

Where SNPS fits in the Synthos Framework Portfolio. Not entered today. Placed on the watch list with a trigger price of ~$360 and, more importantly, an event trigger of the 2026-09-30 Investor Day. Sizing note: this is the best arithmetic in this batch attached to the least protected balance sheet, and the correct response is to wait fifty-seven days for the company to explain its long-term framework — because a stock that has de-rated 36.5% on multiple rather than on earnings is precisely the kind that re-rates on a framework, and precisely the kind that keeps falling without one. Logged as a tracked Synthos call (Watch) as of 2026-08-04 at $403.75, with the fair-value anchors, kill criteria and upgrade conditions all gradeable.

Single biggest risk: the balance sheet the acquisition created, and the fact that nobody is paid to wait for it to heal. Synopsys entered fiscal 2025 with $3.2 billion of net cash and left it with $10.5 billion of net debt. It carries $39,579 million of goodwill and intangibles — 82% of total assets — against $28,328 million of equity, so tangible book value is approximately MINUS $11.3 billion. Its GAAP interest coverage is 1.14x and its GAAP earnings per share in the most recent quarter were $0.09. Against roughly $2.0 billion of guided free cash flow, repaying $14.3 billion of debt is a multi-year project during which no dividend and no buyback is plausible — and the filings confirm none has occurred in two fiscal years. If the operating case works, this is an excellent business deleveraging into a structural demand cycle and the equity does very well. If anything goes wrong — an export-control change the company has already carved out of its guidance, an Ansys synergy shortfall, an impairment — there is no tangible asset behind the equity, no yield to cushion the wait, and a stock that has already shown it can fall 37% inside twelve months. That combination is why the arithmetic says Buy and the verdict says Watch, and the gap between them is stated here rather than resolved by rounding.

Provenance & disclosures

Traceability: 3 independent name-level knowledge-base claims name Synopsys, all BULLISH, out of 52,021 distilled claims (raw hits 49, exact case-sensitive entity matches 30, text-only 19; breadth 3 independent sources, net conviction positive-moderate). jensen_huang 2026-04-15 (conviction 80, entities Synopsys and Cadence) — "AI won't commoditize software tool-makers; exponentially growing agents will use tools, so instances of EDA/software tools skyrocket" — and jensen_huang 2026-03-18 (conviction 80, entities Cadence, CDNS, Synopsys, SNPS, Siemens) are the structural core; both are PROMOTER-CLASS under the four-lane policy — the speaker is the chief executive of the company whose chips are designed with these tools — and are treated as first-class on the MECHANISM and low-weight on the conclusion. compound_and_friends 2026-04-24 (conviction 60, speaker Adam Parker, independent) is the one genuinely independent, speaker-attributed name-level claim, and this dive notes the tension that its argument — buy the expensive software names, cheapness signals disruption risk — now points awkwardly at a stock that has fallen 34.7% and become the cheap one. A fourth claim, jensen_huang 2026-05-01 at conviction 78 — 'Agentic AI lifts the number of ASIC designers ~1000x' — names only CDNS in its entity list, is therefore about Cadence, and is quoted for MECHANISM but NOT counted as a Synopsys claim; the distinction is recorded rather than blurred. TEN of the thirty entity matches are SNPS_mgmt at skill 0.5, all dated 2026-05-27 from a single earnings release: EXCLUDED from the conviction pool per house rule and quoted at HALF WEIGHT, their factual content (raised full-year targets on revenue, operating margin, EPS and free cash flow; the export-control caveat; a 2026-09-30 Investor Day; the pending Processor IP Solutions sale; Design IP restructuring; an 18.0% normalised non-GAAP tax rate through FY2028; and continued planned repurchases against zero actual repurchases in two fiscal years) being the best forward calendar available and appearing nowhere in the payload. All quotes are verbatim from the stored claim text.
Data as-of: second-quarter results, the raised full-year and third-quarter guidance, the revenue-raise decomposition and the Ansys revenue contribution through 2026-04-30, all filing-verified from the 8-K earnings release filed 2026-05-27; the Elliott cooperation agreement from the 8-K filed 2026-05-27 (agreement dated 2026-05-26); the share count from the 8-K filed 2026-04-20; annual balance sheet, cash flow and income statement for fiscal 2025 and 2024 from the payload, cross-checked against the 10-K filed 2025-12-22 · estimates 2026-08-04 · prices 2026-08-04, quote timestamp 1785873600 = 2026-08-04T20:00:00Z ($403.75, +2.98%; 50-DMA $441.95; 200-DMA $449.05; RSI 42.2; MACD −15.97) · knowledge-base claims 2026-08-04. Synopsys' fiscal year ends 31 October. All figures come from the Synthos vendor data file for SNPS or from the SEC filings in the SNPS archive; no figure comes from memory, recall or external retrieval.
Filing archive contents: 10-K filed 2025-12-22 (fiscal 2025); 10-Q filed 2026-02-25 (first quarter fiscal 2026); 10-Q filed 2026-05-27 (second quarter fiscal 2026); 8-K filed 2026-04-20 (Items 5.02 and 5.07 — annual meeting held 2026-04-16, ten directors elected, an Equity Incentive Plan approved, 191,561,935 shares outstanding at the 2026-02-17 record date); 8-K filed 2026-05-27, 39KB (Item 2.02 — the full second-quarter earnings release WITH the raised guidance tables, the revenue-raise decomposition and the Ansys revenue footnote); 8-K filed 2026-05-27, second filing (Items 1.01, 5.02 and 7.01 — the ELLIOTT COOPERATION AGREEMENT dated 2026-05-26, Mr. Cohn's appointment to the Board, and the 4.9% beneficial / 7.5% economic standstill running to at least 2027-05-26). All three 8-Ks were read in full. The corporate actions in this archive are the Elliott cooperation agreement, the raised guidance, the pending Processor IP Solutions divestiture, the completed Optical Solutions Group and PowerArtist RTL divestitures, and the Design IP restructuring — NONE of which appears in any vendor field. All filings carry preserved [TABLE] statement data, and the guidance tables were therefore fully extractable.
Where the filings contradicted or corrected the vendor (detailed in Section 6): netDebt of $11,405,388k against a correct $10,523,556k — an $881,832k overstatement decomposing EXACTLY into $808,903k of lease obligations added to debt and $72,929k of short-term investments omitted from cash, both documented defect classes in a single field — invalidating netDebtToEBITDATTM, debtToEquityRatioTTM, debtToAssetsRatioTTM and any derived enterprise value (rebuilt: $87,833.4M); priceToEarningsRatioTTM of 91.35x, an Ansys purchase-accounting artefact reflecting roughly $12.7 billion of newly recognised amortisable intangibles and interest on $14.3 billion of new debt, against a June-quarter GAAP diluted EPS of $0.09 versus $2.24 a year earlier — rejected with netProfitMarginTTM, operatingProfitMarginTTM, netIncomePerShareTTM and effectiveTaxRateTTM as measures of operating quality; inc_q weightedAverageShsOutDil of 161,682,000 in BOTH the fiscal-2025 fourth quarter and the fiscal-2026 first quarter — identical to the fiscal-2025 full-year figure — against 191,580,000 in the following quarter and management's guided 192-194 million, a stale pre-acquisition count carried into post-acquisition periods while neighbouring revenue fields in the same rows are exactly correct; est.ebitdaAvg/ebitAvg, carrying the fixed-ratio signature in three tranches — 29.5578%/23.8342% from fiscal 2024 to 2029, 23.2525%/18.4467% in fiscal 2023 and 24.2471%/19.2358% in fiscal 2022 — with the forward EBIT margin of 23.83% corresponding to neither the GAAP 8.36% nor the guided non-GAAP basis; and five corporate actions absent from every vendor field. Where vendor and filing AGREED — recorded: inc_q second-quarter fiscal-2026 revenue of $2,275,985k, net income of $17,105k and diluted EPS of $0.089 all match the earnings release exactly ($2.276 billion, $17.1 million, $0.09); first-quarter revenue of $2,408,798k matches the earn_cal actual exactly; capitalExpenditure is IDENTICAL to investmentsInPropertyPlantAndEquipment in both fiscal years with no definition change and no sign error, and freeCashFlow reconciles exactly as $1,518,608k − $169,454k = $1,349,154k (recorded as internally consistent rather than filing-verified, because no filed capital-expenditure line was located in the extracted text); acquisitionsNet of −$15,890,428k is correctly signed and correctly sized against the Ansys transaction; tangibleBookValuePerShareTTM of −$43.32 is CORRECT rather than defective and properly distinct from bookValuePerShareTTM of $159.97, so the identical-book defect was checked and does not apply; the share count reconciles to 0.04% (191,479,000 implied against 191,561,935 filed); and dividendYieldTTM and dividendPerShareTTM both reading ZERO is CORRECT — Synopsys pays no dividend, and this is not a missing field.
Estimate coverage: 15 analysts on fiscal-2026 EPS with a 3.8% range ($14.404 to $14.945, sitting almost exactly on management's guided $14.72-$14.80); 15 on fiscal-2027 — the anchor for all three fair values — with a range of $16.61072 to $18.18214, a 9.4% spread, which for a company mid-integration is unusually tight; and 9 on fiscal-2028 with a range of $13.995 to $33.723, a 141% spread, used only as a directional cross-check. Fiscal 2029 rests on 3 analysts and is excluded. est.ebitdaAvg and est.ebitAvg are rejected outright and all forward valuation uses epsAvg only.
Peer note: the vendor peer set — Autodesk, Cadence Design Systems, CoreWeave, Fortinet, Corning, Strategy Inc, Cloudflare, NetEase, Snowflake, TE Connectivity — contains exactly ONE correct comparable, alongside a bitcoin treasury company, a Chinese gaming publisher, a glass manufacturer and a connector manufacturer. Siemens EDA is absent. No peer-multiple comparison is drawn.
Fair-value caveat: the $266 / $468 / $655 anchors are multiples of the fiscal-2027 consensus non-GAAP EPS distribution — 16.0x the low of $16.61072, 27.0x the mean of $17.32592 and 36.0x the high of $18.18214 — cross-checked against management's guided fiscal-2026 range of $14.72-$14.80 and against enterprise value to revenue (6.2x, 9.5x and 12.4x on the fiscal-2027 consensus). Stated arithmetic, not a discounted cash flow. The base is sensitivity-disclosed: 16x gives $277, 20x gives $347, 23.3x gives $403.75 — spot exactly — 30x gives $520 and 35x gives $606. The base REQUIRES a 16% multiple expansion from a level that already reflects a 36.5% de-rating, and that is the fragile leg, named as such; at an unchanged multiple the twelve-month return is 17.2% of earnings growth and NOTHING else, because the shareholder yield is zero.
Basis note: all forward multiples use non-GAAP earnings, which is the basis management guides to and analysts model. The gap to GAAP is currently enormous and disclosed: a June-quarter GAAP diluted EPS of $0.09 against a non-GAAP $3.35, and full-year guidance of GAAP $2.49-$2.91 against non-GAAP $14.72-$14.80 — a midpoint difference of $12.06 per share, driven by acquisition amortisation on $12.7 billion of intangibles, integration and restructuring costs, and stock-based compensation of $893.3 million in fiscal 2025. The trailing GAAP price-to-earnings ratio of 91.3x is used nowhere in this dive except to explain itself.
Guidance note: all forward statements attributed to management — the raised fiscal-2026 targets, the third-quarter range, the approximately $2.0 billion free-cash-flow figure, the 18.0% non-GAAP tax rate through fiscal 2028, the Ansys synergy expectation, the Investor Day, the Processor IP Solutions divestiture and the statement that the company "continues to plan stock repurchases" — are company guidance and are half-weighted per house rule. The guidance is explicitly conditioned on "no further export-control/Entity List changes", and that carve-out is unquantified anywhere in this archive; this dive does not estimate it. Earnings-call transcripts are not available on the current data plan.
Timing: second-quarter fiscal 2026 results were released 2026-05-27, sixty-nine days before this dive, beat consensus non-GAAP EPS by 6.3% ($3.35 against $3.15) and carried the raised full-year guidance. The next print is 2026-08-26, 22 days away, at a consensus of $3.67 against management's guided $3.63-$3.69. A second catalyst follows on 2026-09-30 — an Investor Day at which long-term financial targets will be set — and it is arguably the more important of the two. The only insider filing is dated 2026-06-15 and is an option exercise. 2026-08-04 carried no company-specific filing.
Accessibility note: no information in this dive is conveyed by colour. All emphasis is carried by bold text, table structure and explicit labelling.
Not investment advice. Independent research, educational and informational only, never personalised. No recommendation to buy, sell or hold any security is made to any person.
Version: 2026-08-04-full.