Stock Analysis on Net

Synopsys Inc. (NASDAQ:SNPS)

$24.99

Price to Sales (P/S)
since 2005

Microsoft Excel

Calculation

Synopsys Inc., P/S, long-term trends, calculation

Microsoft Excel

Based on: 10-K (reporting date: 2025-10-31), 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).

1 US$

2 Data adjusted for splits and stock dividends.

3 Closing price as at the filing date of Synopsys Inc. Annual Report.


The Price-to-Sales (P/S) ratio for the analyzed period demonstrates considerable fluctuation. Initially, the ratio exhibited an increasing trend from 2006 to 2007, peaking at 3.54, before declining significantly in 2008. Following this decline, the ratio experienced a period of moderate recovery and stability, then a substantial increase beginning in 2019, reaching a high of 14.75 in 2022. A subsequent decrease is observed in 2023 and 2024, with a slight increase in the most recent period.

Initial Period (2006-2008)
From 2006 to 2007, the P/S ratio increased from 3.15 to 3.54, indicating investors were willing to pay more for each dollar of sales. However, a sharp decrease occurred in 2008, with the ratio falling to 1.93, likely reflecting broader economic conditions and investor sentiment during that period.
Recovery and Stability (2009-2018)
The period between 2009 and 2018 shows a recovery and relative stabilization of the P/S ratio. It generally trended upwards, albeit with some year-to-year variation, reaching 4.80 in 2017. This suggests a gradual improvement in investor confidence and a willingness to pay a premium for sales during this time.
Significant Increase (2019-2022)
A marked increase in the P/S ratio is evident from 2019 onwards. The ratio climbed from 6.27 in 2019 to a peak of 14.75 in 2022. This substantial rise suggests a significant shift in market perception, potentially driven by strong growth prospects, increased profitability, or favorable industry trends. The ratio more than doubled in this period.
Recent Fluctuations (2023-2025)
The most recent years show a decrease from the 2022 peak, falling to 12.45 in 2023 and 13.05 in 2025. This suggests a potential correction or a change in investor expectations. While still elevated compared to earlier periods, the decline indicates a moderating valuation relative to sales. The ratio remains volatile.

The share price and sales per share both generally increased over the period, contributing to the observed changes in the P/S ratio. The substantial increase in the P/S ratio from 2019 onwards appears disproportionate to the growth in sales per share, suggesting a significant re-evaluation of the company by investors. The recent decline in the P/S ratio, despite continued sales growth, may indicate a normalization of valuation levels.


Comparison to Competitors

Synopsys Inc., P/S, long-term trends, comparison to competitors

Microsoft Excel

Based on: 10-K (reporting date: 2025-10-31), 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31), 10-K (reporting date: 2016-10-31), 10-K (reporting date: 2015-10-31), 10-K (reporting date: 2014-10-31), 10-K (reporting date: 2013-10-31), 10-K (reporting date: 2012-10-31), 10-K (reporting date: 2011-10-31), 10-K (reporting date: 2010-10-31), 10-K (reporting date: 2009-10-31), 10-K (reporting date: 2008-10-31), 10-K (reporting date: 2007-10-31), 10-K (reporting date: 2006-10-31), 10-K (reporting date: 2005-10-31).


Comparison to Sector (Software & Services)


Comparison to Industry (Information Technology)