Intrinsic value of Synopsys - SNPS

Previous Close

$77.22

  Intrinsic Value

$90.00

stock screener

  Rating & Target

hold

+17%

  Value-price divergence*

+153%

Previous close

$77.22

 
Intrinsic value

$90.00

 
Up/down potential

+17%

 
Rating

hold

 
Value-price divergence*

+153%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of SNPS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.07
  12.40
  11.66
  10.99
  10.39
  9.86
  9.37
  8.93
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.52
  6.37
  6.23
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
Revenue, $m
  2,423
  2,723
  3,041
  3,375
  3,726
  4,093
  4,477
  4,877
  5,293
  5,727
  6,177
  6,645
  7,132
  7,638
  8,163
  8,709
  9,278
  9,869
  10,484
  11,125
  11,792
  12,488
  13,213
  13,970
  14,760
  15,585
  16,448
  17,349
  18,291
  19,276
  20,307
Variable operating expenses, $m
 
  1,911
  2,104
  2,308
  2,521
  2,745
  2,979
  3,222
  3,476
  3,740
  4,014
  4,048
  4,344
  4,652
  4,972
  5,305
  5,651
  6,011
  6,386
  6,776
  7,182
  7,606
  8,048
  8,509
  8,990
  9,493
  10,018
  10,567
  11,140
  11,741
  12,369
Fixed operating expenses, $m
 
  397
  407
  417
  427
  438
  449
  460
  472
  483
  495
  508
  520
  533
  547
  560
  575
  589
  604
  619
  634
  650
  666
  683
  700
  717
  735
  754
  773
  792
  812
Total operating expenses, $m
  2,105
  2,308
  2,511
  2,725
  2,948
  3,183
  3,428
  3,682
  3,948
  4,223
  4,509
  4,556
  4,864
  5,185
  5,519
  5,865
  6,226
  6,600
  6,990
  7,395
  7,816
  8,256
  8,714
  9,192
  9,690
  10,210
  10,753
  11,321
  11,913
  12,533
  13,181
Operating income, $m
  317
  416
  530
  651
  778
  911
  1,050
  1,195
  1,346
  1,504
  1,668
  2,090
  2,268
  2,452
  2,644
  2,844
  3,052
  3,269
  3,495
  3,730
  3,976
  4,232
  4,499
  4,778
  5,070
  5,375
  5,694
  6,028
  6,378
  6,743
  7,127
EBITDA, $m
  524
  703
  821
  946
  1,077
  1,215
  1,359
  1,509
  1,666
  1,829
  1,999
  2,176
  2,359
  2,551
  2,750
  2,956
  3,172
  3,396
  3,630
  3,874
  4,128
  4,393
  4,669
  4,958
  5,260
  5,576
  5,906
  6,252
  6,613
  6,992
  7,388
Interest expense (income), $m
  4
  0
  8
  16
  25
  35
  44
  54
  65
  76
  88
  100
  112
  125
  138
  152
  167
  182
  198
  214
  231
  249
  267
  286
  306
  327
  349
  372
  396
  421
  447
Earnings before tax, $m
  330
  416
  522
  635
  752
  876
  1,005
  1,140
  1,281
  1,427
  1,580
  1,990
  2,156
  2,327
  2,506
  2,692
  2,885
  3,087
  3,297
  3,516
  3,745
  3,983
  4,232
  4,492
  4,764
  5,048
  5,345
  5,656
  5,981
  6,322
  6,679
Tax expense, $m
  63
  112
  141
  171
  203
  237
  271
  308
  346
  385
  427
  537
  582
  628
  677
  727
  779
  834
  890
  949
  1,011
  1,075
  1,143
  1,213
  1,286
  1,363
  1,443
  1,527
  1,615
  1,707
  1,803
Net income, $m
  267
  304
  381
  463
  549
  639
  734
  832
  935
  1,042
  1,153
  1,453
  1,574
  1,699
  1,829
  1,965
  2,106
  2,254
  2,407
  2,567
  2,734
  2,908
  3,089
  3,279
  3,477
  3,685
  3,902
  4,129
  4,366
  4,615
  4,876

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,117
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,240
  4,632
  5,172
  5,740
  6,337
  6,962
  7,614
  8,294
  9,002
  9,739
  10,505
  11,302
  12,129
  12,989
  13,883
  14,812
  15,778
  16,784
  17,830
  18,919
  20,054
  21,238
  22,471
  23,759
  25,103
  26,506
  27,972
  29,504
  31,106
  32,782
  34,536
Adjusted assets (=assets-cash), $m
  4,123
  4,632
  5,172
  5,740
  6,337
  6,962
  7,614
  8,294
  9,002
  9,739
  10,505
  11,302
  12,129
  12,989
  13,883
  14,812
  15,778
  16,784
  17,830
  18,919
  20,054
  21,238
  22,471
  23,759
  25,103
  26,506
  27,972
  29,504
  31,106
  32,782
  34,536
Revenue / Adjusted assets
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
  0.588
Average production assets, $m
  444
  498
  557
  618
  682
  749
  819
  892
  969
  1,048
  1,130
  1,216
  1,305
  1,398
  1,494
  1,594
  1,698
  1,806
  1,919
  2,036
  2,158
  2,285
  2,418
  2,557
  2,701
  2,852
  3,010
  3,175
  3,347
  3,528
  3,716
Working capital, $m
  2
  -272
  -304
  -338
  -373
  -409
  -448
  -488
  -529
  -573
  -618
  -665
  -713
  -764
  -816
  -871
  -928
  -987
  -1,048
  -1,112
  -1,179
  -1,249
  -1,321
  -1,397
  -1,476
  -1,559
  -1,645
  -1,735
  -1,829
  -1,928
  -2,031
Total debt, $m
  205
  226
  467
  720
  986
  1,265
  1,556
  1,859
  2,175
  2,504
  2,845
  3,201
  3,570
  3,953
  4,352
  4,766
  5,197
  5,645
  6,112
  6,598
  7,104
  7,632
  8,182
  8,756
  9,356
  9,982
  10,635
  11,319
  12,033
  12,781
  13,563
Total liabilities, $m
  2,045
  2,066
  2,307
  2,560
  2,826
  3,105
  3,396
  3,699
  4,015
  4,344
  4,685
  5,041
  5,410
  5,793
  6,192
  6,606
  7,037
  7,485
  7,952
  8,438
  8,944
  9,472
  10,022
  10,596
  11,196
  11,822
  12,475
  13,159
  13,873
  14,621
  15,403
Total equity, $m
  3,195
  2,566
  2,865
  3,180
  3,511
  3,857
  4,218
  4,595
  4,987
  5,395
  5,820
  6,261
  6,720
  7,196
  7,691
  8,206
  8,741
  9,298
  9,878
  10,481
  11,110
  11,766
  12,449
  13,162
  13,907
  14,684
  15,496
  16,345
  17,233
  18,161
  19,133
Total liabilities and equity, $m
  5,240
  4,632
  5,172
  5,740
  6,337
  6,962
  7,614
  8,294
  9,002
  9,739
  10,505
  11,302
  12,130
  12,989
  13,883
  14,812
  15,778
  16,783
  17,830
  18,919
  20,054
  21,238
  22,471
  23,758
  25,103
  26,506
  27,971
  29,504
  31,106
  32,782
  34,536
Debt-to-equity ratio
  0.064
  0.090
  0.160
  0.230
  0.280
  0.330
  0.370
  0.400
  0.440
  0.460
  0.490
  0.510
  0.530
  0.550
  0.570
  0.580
  0.590
  0.610
  0.620
  0.630
  0.640
  0.650
  0.660
  0.670
  0.670
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
Adjusted equity ratio
  0.504
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554
  0.554

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  267
  304
  381
  463
  549
  639
  734
  832
  935
  1,042
  1,153
  1,453
  1,574
  1,699
  1,829
  1,965
  2,106
  2,254
  2,407
  2,567
  2,734
  2,908
  3,089
  3,279
  3,477
  3,685
  3,902
  4,129
  4,366
  4,615
  4,876
Depreciation, amort., depletion, $m
  207
  287
  291
  295
  300
  305
  309
  315
  320
  326
  331
  86
  92
  98
  105
  112
  120
  127
  135
  143
  152
  161
  170
  180
  190
  201
  212
  224
  236
  248
  262
Funds from operations, $m
  615
  591
  672
  759
  849
  944
  1,043
  1,147
  1,255
  1,368
  1,485
  1,539
  1,665
  1,797
  1,935
  2,077
  2,226
  2,381
  2,542
  2,710
  2,886
  3,069
  3,260
  3,459
  3,668
  3,886
  4,114
  4,352
  4,602
  4,864
  5,138
Change in working capital, $m
  28
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -70
  -73
  -76
  -79
  -83
  -86
  -90
  -94
  -99
  -103
Cash from operations, $m
  587
  621
  704
  792
  884
  981
  1,082
  1,187
  1,297
  1,411
  1,530
  1,585
  1,714
  1,848
  1,987
  2,132
  2,283
  2,440
  2,604
  2,774
  2,952
  3,138
  3,332
  3,535
  3,747
  3,968
  4,200
  4,442
  4,696
  4,962
  5,241
Maintenance CAPEX, $m
  0
  -31
  -35
  -39
  -43
  -48
  -53
  -58
  -63
  -68
  -74
  -80
  -86
  -92
  -98
  -105
  -112
  -120
  -127
  -135
  -143
  -152
  -161
  -170
  -180
  -190
  -201
  -212
  -224
  -236
  -248
New CAPEX, $m
  -131
  -54
  -58
  -61
  -64
  -67
  -70
  -73
  -76
  -79
  -82
  -86
  -89
  -93
  -96
  -100
  -104
  -108
  -113
  -117
  -122
  -127
  -133
  -139
  -145
  -151
  -158
  -165
  -172
  -180
  -189
Cash from investing activities, $m
  -143
  -85
  -93
  -100
  -107
  -115
  -123
  -131
  -139
  -147
  -156
  -166
  -175
  -185
  -194
  -205
  -216
  -228
  -240
  -252
  -265
  -279
  -294
  -309
  -325
  -341
  -359
  -377
  -396
  -416
  -437
Free cash flow, $m
  444
  535
  611
  692
  776
  866
  959
  1,056
  1,158
  1,263
  1,374
  1,420
  1,539
  1,663
  1,792
  1,927
  2,067
  2,212
  2,364
  2,522
  2,687
  2,859
  3,038
  3,226
  3,422
  3,627
  3,841
  4,066
  4,300
  4,546
  4,804
Issuance/(repayment) of debt, $m
  0
  226
  241
  254
  266
  279
  291
  303
  316
  329
  342
  355
  369
  384
  399
  414
  431
  448
  467
  486
  506
  528
  550
  574
  599
  626
  654
  683
  715
  747
  782
Issuance/(repurchase) of shares, $m
  -275
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -307
  226
  241
  254
  266
  279
  291
  303
  316
  329
  342
  355
  369
  384
  399
  414
  431
  448
  467
  486
  506
  528
  550
  574
  599
  626
  654
  683
  715
  747
  782
Total cash flow (excl. dividends), $m
  140
  761
  852
  945
  1,043
  1,144
  1,250
  1,359
  1,474
  1,592
  1,715
  1,775
  1,908
  2,047
  2,191
  2,341
  2,498
  2,661
  2,830
  3,008
  3,193
  3,387
  3,589
  3,800
  4,021
  4,253
  4,495
  4,749
  5,015
  5,294
  5,586
Retained Cash Flow (-), $m
  -61
  -283
  -299
  -315
  -331
  -346
  -361
  -377
  -392
  -408
  -424
  -441
  -458
  -476
  -495
  -515
  -535
  -557
  -580
  -604
  -629
  -655
  -684
  -713
  -744
  -777
  -812
  -849
  -888
  -928
  -971
Prev. year cash balance distribution, $m
 
  912
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,390
  553
  630
  712
  798
  888
  983
  1,081
  1,184
  1,291
  1,334
  1,450
  1,571
  1,696
  1,826
  1,962
  2,104
  2,251
  2,404
  2,564
  2,731
  2,905
  3,087
  3,277
  3,475
  3,683
  3,900
  4,127
  4,365
  4,614
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,333
  506
  548
  586
  619
  645
  664
  676
  680
  677
  634
  619
  597
  569
  536
  499
  458
  415
  370
  326
  282
  241
  202
  167
  135
  107
  84
  64
  48
  35
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Synopsys, Inc. provides electronic design automation (EDA) software products used to design and test integrated circuits (ICs). It offers Galaxy Design platform that provides IC design solutions; Verification Continuum Platform, which offers virtual prototyping, static and formal verification, simulation, emulation, field-programmable gate array (FPGA)-based prototyping, and debug solutions; and FPGA design products that are programmed to perform specific functions. The company also provides DesignWare intellectual property (IP) solutions for USB, PCI Express, DDR, Ethernet, SATA, MIPI, HDMI, and Bluetooth low energy applications; analog IP, including data converters and audio codecs; and system-on-chip infrastructure IP, datapath and building block IP, and verification IP products, as well as mathematical and floating point components, and ARM AMBA interconnect fabric and peripherals. In addition, it offers logic libraries and embedded memories; configurable processor cores and application-specific instruction-set processor tools for embedded applications; IP subsystems for audio, sensor, and data fusion functionality; and security IP solutions. Further, the company provides Platform Architect tools for SoC architecture analysis and optimization; virtual prototyping solutions for creating virtual prototypes and virtualizer development kits; physical prototyping solutions consisting of HAPS hardware and HAPS protocompiler tools; and hybrid prototyping solutions, as well as a series of tools used in the design of optical systems and photonic devices. Additionally, it offers software quality and security testing tools that help companies reduce the risk of defects and vulnerabilities in development, as well as across the software supply chain; manufacturing solutions that enable semiconductor manufacturers to develop fabrication processes; and professional services and others. The company was founded in 1986 and is headquartered in Mountain View, California.

FINANCIAL RATIOS  of  Synopsys (SNPS)

Valuation Ratios
P/E Ratio 43.8
Price to Sales 4.8
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow 19.9
Price to Free Cash Flow 25.6
Growth Rates
Sales Growth Rate 8.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -69.6%
Cap. Spend. - 3 Yr. Gr. Rate 13.7%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 6.4%
Interest Coverage 84
Management Effectiveness
Return On Assets 5.3%
Ret/ On Assets - 3 Yr. Avg. 5.2%
Return On Total Capital 7.9%
Ret/ On T. Cap. - 3 Yr. Avg. 7.8%
Return On Equity 8.4%
Return On Equity - 3 Yr. Avg. 8.2%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 77.6%
Gross Margin - 3 Yr. Avg. 77.4%
EBITDA Margin 22.3%
EBITDA Margin - 3 Yr. Avg. 22.4%
Operating Margin 13.1%
Oper. Margin - 3 Yr. Avg. 12.3%
Pre-Tax Margin 13.6%
Pre-Tax Margin - 3 Yr. Avg. 13.1%
Net Profit Margin 11%
Net Profit Margin - 3 Yr. Avg. 11.2%
Effective Tax Rate 19.1%
Eff/ Tax Rate - 3 Yr. Avg. 14.6%
Payout Ratio 0%

SNPS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SNPS stock intrinsic value calculation we used $2423 million for the last fiscal year's total revenue generated by Synopsys. The default revenue input number comes from 2016 income statement of Synopsys. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SNPS stock valuation model: a) initial revenue growth rate of 12.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for SNPS is calculated based on our internal credit rating of Synopsys, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Synopsys.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SNPS stock the variable cost ratio is equal to 71.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $387 million in the base year in the intrinsic value calculation for SNPS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Synopsys.

Corporate tax rate of 27% is the nominal tax rate for Synopsys. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SNPS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SNPS are equal to 18.3%.

Life of production assets of 14.2 years is the average useful life of capital assets used in Synopsys operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SNPS is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3195 million for Synopsys - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 148.81 million for Synopsys is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Synopsys at the current share price and the inputted number of shares is $11.5 billion.

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COMPANY NEWS

▶ Synopsys meets 3Q profit forecasts   [Aug-16-17 09:21PM  Associated Press]
▶ What To Expect From NetApp, Synopsys Earnings   [Aug-15-17 11:46AM  Investor's Business Daily]
▶ ETFs with exposure to Synopsys, Inc. : July 25, 2017   [Jul-25-17 01:17PM  Capital Cube]
▶ Toshiba Selects Synopsys VC Formal Verification Solution   [Jun-15-17 09:05AM  PR Newswire]
▶ ETFs with exposure to Synopsys, Inc. : May 26, 2017   [May-26-17 01:26PM  Capital Cube]
▶ CAD Software Firm Autodesk Soars On Quarterly Earnings Beat   [May-18-17 05:18PM  Investor's Business Daily]
▶ Synopsys beats Street 2Q forecasts   [May-17-17 04:18PM  Associated Press]
▶ Internet Giant To Join China Parade; Cisco Near Entry: Investing Action Plan   [May-16-17 04:42PM  Investor's Business Daily]
▶ This Top Software Stock Is Breaking Out; 3 Others Are In Buy Range   [May-15-17 04:15PM  Investor's Business Daily]
▶ Cadence Design Stock Slips On Disappointing Guidance   [Apr-25-17 04:55PM  Investor's Business Daily]
▶ These 3 Software Makers Broke Out To Buys, But With A Design Flaw   [Apr-24-17 04:18PM  Investor's Business Daily]
▶ Which Stocks May Profit From Self-Driving Cars? Here's One   [Mar-31-17 04:05PM  Investor's Business Daily]
▶ Breakout Watch: This IoT Stock Helps Self-Driving Cars See   [Mar-30-17 09:12PM  Investor's Business Daily]
▶ Will A Market Rebound Unleash These Potential Breakout Stocks?   [Mar-27-17 01:06PM  Investor's Business Daily]
Stock chart of SNPS Financial statements of SNPS
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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