Is Synopsys Inc (SNPS) overvalued?
On Equity Rank's model estimate, SNPS trades 36% above its fair value. Synopsys Inc (SNPS) last closed at $450.46; the multi-method model fair value is $330.84.
| Price | Model fair value | Price vs model |
|---|---|---|
| $450.46 | $330.84 | 36% above |
What the answer rests on
- 2 of 8 valuation methods put SNPS's value above its price and 6 put it below, so the methods mostly agree.
- To justify today's price, SNPS's free cash flow would need to grow about 23.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -5.5% a year.
- Over the past year the price sat below the model fair value on 23% of trading days. The gap ranged from 12% below to 46% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind SNPS's fair value · What prices assume · Other companies