Is Synopsys Stock Underperforming the Nasdaq?

With a market cap of $79.7 billion, Synopsys, Inc. (SNPS) is a leading provider of design automation and design IP solutions for the semiconductor and electronics industries. It also offers pre-verified, silicon-proven IP solutions including processors, security IP, SoC infrastructure, and automotive-focused offerings.

Companies valued at more than $10 billion are generally considered “large-cap” stocks, and Synopsys fits this criterion perfectly.  Operating through its Design Automation and Design IP segments, the company delivers advanced tools for digital and custom IC design, verification, FPGA design, TCAD, manufacturing analytics, and AI-driven electronic design automation (EDA).

Despite this, shares of the Sunnyvale, California-based company have decreased 32.2% from its 52-week high of $615.79. SNPS stock has decreased 18.2% over the past three months, a more pronounced decline than the Nasdaq Composite’s ($NASX) 3.2% dip over the same time frame. 

The stock is down 11.4% on a YTD basis, underperforming NASX’s 12.8% gain. In the longer term, shares of Synopsys have declined 29.7% over the past 52 weeks, compared to NASX’s 23.2% return over the same time frame.

SNPS stock has been trading below its 200-day moving average since last year. 

Synopsys has been underperforming over the past year as its growth has fallen short of expectations, particularly as the market has rewarded faster-growing AI infrastructure and semiconductor-related companies. China-related headwinds and concerns around the pace of growth and the monetization and integration of recent acquisitions such as Ansys.

In comparison, SNPS stock has lagged behind its rival Microsoft Corporation (MSFT). MSFT stock has gained 3.6% on a YTD basis and declined marginally over the past 52 weeks.

Despite the stock’s underperformance over the past year, analysts remain strongly optimistic on Synopsys. The stock has a consensus rating of “Strong Buy” from 21 analysts in coverage, and the mean price target of $551.18 suggests 32.5% upside potential from current price levels. 

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.