SNPS
Synopsys
Recurring SaaS
★ Quality 36/100Price today
$387.87
what the market pays
Worth
$133.56
calculated cycle value
Price is 190% above its value
charlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Software and subscriptions
$197.09
per share
How it's calculated
Synopsys — high assistant path (2026-06-07). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Recurring SaaS · vs 26 peers
You pay 55.4x times this business's cash flow; its sector median is 20.3x.
56% above what Charlie thinks it's worth (24.2x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $8.14/share × 24.2x multiplier minus $63.53 in negative net cash = $133.56 in intrinsic value. Today's price of $387.87 is 66% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 190% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $126.88.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$106.85
-20% off Value
🟡 Discounted
≤$126.88
-5% off Value
🔴 Today
$387.87
-66% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Synopsys is the printing press without which no advanced chip gets born.
Synopsys sells the EDA tools used to design chips: software that simulates, verifies, and signs off silicon before it gets manufactured. It charges for recurring multi-year licenses plus IP embedded in the designs, which gives it $7.1B in revenue with a 77% gross margin. Without its tools, nobody brings an advanced chip to production.
Together with Cadence it forms a real duopoly: any chip from Nvidia, Apple, or TSMC runs through its software. The switching cost is brutal because a design team takes years to master the flow and one migration error costs a tape-out worth millions. The Ansys acquisition adds physical simulation to the same flow, deepening the moat.
Revenue history
From $4.2B to $7.1B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $7.1B · FY2025
Of every $100 in sales, $81 goes to costs and operations; $19 is left as net profit (19% margin).
Catalysts and risks
Ansys integration (closed July 2025, ~$35B) expanding the addressable market toward multiphysics simulation.
AI chip design boom: every hyperscaler designing its own silicon needs more EDA licenses.
Multi-year backlog model that provides visibility: the conversion of RPO to revenue sustains the 14% CAGR.
$13.5B of debt against $3.0B of cash after Ansys: the balance sheet lost its cushion.
Exposure to China under U.S. export controls that could tighten further.
Valuation: at 24.2x on normalized FCFps of $8.14, the intrinsic value of $133.56 leaves little margin if the CAGR disappoints.
Charlie's note
“It's a toll on the entire semiconductor industry, and tolls age well. The Ansys debt makes me look twice, but I'd pay for a business where the customer would rather lose an arm than switch providers.”
Analysis · June 2026
So when would be a good price for Synopsys?
By our calculation, not yet. We will email you the day it drops to $126.88 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.