Trade-Ideas: Synopsys (SNPS) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Synopsys ( SNPS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Synopsys as such a stock due to the following factors:

  • SNPS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $39.8 million.
  • SNPS has traded 20,000 shares today.
  • SNPS is trading at a new lifetime high.

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More details on SNPS:

Synopsys, Inc. provides electronic design automation (EDA) software products used to design and test integrated circuits and electronic systems in the United States, Europe, Japan, and the rest of Asia Pacific. SNPS has a PE ratio of 31. Currently there are 5 analysts that rate Synopsys a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Synopsys has been 624,100 shares per day over the past 30 days. Synopsys has a market cap of $7.6 billion and is part of the technology sector and electronics industry. The stock has a beta of 0.74 and a short float of 1.2% with 1.72 days to cover. Shares are up 12.3% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Synopsys as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SNPS's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
  • Compared to its closing price of one year ago, SNPS's share price has jumped by 29.38%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SNPS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $155.08 million or 38.70% when compared to the same quarter last year. In addition, SYNOPSYS INC has also vastly surpassed the industry average cash flow growth rate of -16.85%.

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