Synopsys, Inc. (SNPS) Stock Could Break Resistance and Hit $91.69

Synopsys, Inc. (NASDAQ:SNPS) dropped -0.08% in recent trade and currently has a stock-market value of $13.62B. The shares finished at $91.41, after trading as low as $91.09 earlier in the session. It hit an intraday high Friday at $91.67. Trading activity significantly weakened as the volume at ready counter decreased to 642,334 shares versus 930,260 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 1,003,687 shares. The stock is now 22.42% above against its bear-market low of $74.67 on July 14, 2017. It has retreated -3.71% since it’s 52-week high of $94.8 reached in November. Now the market price is up 22.06% on the year and up 7.24% YTD.

SNPS’s 50 day simple moving average (SMA 50) price is $88.96 and its 200-day simple moving average (SMA 200) price is $87.12. The company’s stock currently has a total float of 147.85M shares. Its weekly volatility is hovering around 1.31% and felt 1.55% volatility in price over a month. On the upside, the share price will test short term resistance at around $91.69. On a downside, the stock is likely to find some support, which begins at $91.11. The failure to get near-term support could push it to $90.81.

The insider holding in Synopsys, Inc. (SNPS) stood at 0.3% while institutions hold 91.4%. State Street Corp is the largest single holder among mutual funds with ownership of over 6.55M SNPS shares as of March 31, with a market value of approx. $545.33M as of today. The second largest holder, Dodge & Cox, with 5.53M shares which equates to $459.95M worth of the stock. At third is Ameriprise Financial Inc, which stood pat with 5.06M shares, a 3.1% position in Synopsys, Inc., worth $421.03M.

Separately, it has been reported that multiple insider activity took place at Synopsys, Inc. (SNPS). General Counsel & Runkel John F Jr sold 9,802 shares for $15,384 in transaction occurred on 2018/06/07. After making this transaction, the General Counsel & owns a direct stake of 882,180 shares, worth $1,406,251, as per the last closing price. On 2018/05/25 Chan Chi-Foon, Co-CEO & President at SNPS, dumped 42,831 shares at an average price of $88.08 per share. The selling total is valued at $18,807,059.

EVP, Sales & Corp Marketing, Logan Joseph W had divested 20,000 shares for $68,271 through a trade on 2018/05/25. Following this activity, the insider holds 1,766,600 shares worth $6,240,652 as of recent close.Wall Street’s most bullish Synopsys, Inc. (NASDAQ:SNPS) analysts are predicting the share price to blow past $124 per share during the next 12 months. The current median share price forecast by them is $105, suggesting that the stock could increase 14.87% in that time frame. The average price target of $105.43 calls for a nearly 15.34% increase in the stock price.

It had seen a negative analyst call from JP Morgan, which downgraded the stock from Neutral to Underweight on December 12. Analysts at Needham, maintained the company shares at Buy on December 01 but switched target price from $83 to $100. Brokerage firm Needham, looks cautious as they stick to prior recommendation of Buy, in a call on November 30. However, they did change the target price from $83 to $100.

When looking at valuations, Synopsys, Inc. (SNPS) has a pricey P/E of 65.43x as compared to industry average of 38.84x. Moreover, it trades for 22 times the next 12 months of expected earnings. Also, it is trading at rather inexpensive levels at just over 4.18x price/book and 4.64x price/sales.Compared to others, Synopsys, Inc. is in a different league with regards to profitability, having net margins of 3.2%. To put some perspective around this, the industry’s average net margin is 14.32%. SNPS’s ROE is 2.9%, which is also considerably worse than the industry’s ROE of 16.68%. It’s also not liquid in the near term, with a current ratio of 0.7. The stock has a debt/capital of 0.16.

Shares of Synopsys, Inc. (SNPS) have gained 1.3% since the company’s Jul-18 earnings report. Over the past 12 fiscal quarters, Synopsys, Inc. (NASDAQ:SNPS) has topped consensus earnings estimates in 9 quarters (75%), missed earnings in 3 quarters (25%), whereas at 0 occasion EPS met analyst expectations. SNPS last reported earnings on May 23, 2018 when it released Apr-18 results that receded expectations. The company raked in $1.08 per share, 730.77% change on the same period last year. That was worse than consensus for $1.08. Revenue for the recent quarter stood at $776.84 million, up 14% on last year and above the $775.6 million predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $770 million to $780 million, which should be compared with $711.81 million generated last year. EPS is seen in a range of $0.9 to $0.93, against the $0.92 reported a year ago.