Synopsys, Inc. (NasdaqGS:SNPS) Shareholder Return in Focus

Looking at some ROIC (Return on Invested Capital) numbers, Synopsys, Inc. (NasdaqGS:SNPS)’s ROIC Quality Score is 10.344129. ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits.  This formula is calculated by 5 year average Return on Invested Capital (ROIC) / Standard Deviation of the 5 year ROIC.  The higher the ratio, the better as a higher score indicates a more stable return on invested capital.

Individual investors may be going to great lengths to make their hard earned money work for them in the stock market. The stock market can be a scary place for beginners with little to no experience. Studying the ins and outs of the markets can help provide a solid base for the new investor to work with. Many people will jump into the game thinking they are going to easily make large profits in the market. Although this is a possibility, many investors will learn the hard way that sustaining profits over the long-term can be a tough endeavor. Studying all the different company information can take up a lot of time and energy. Some people just don’t have the time they would like to put into stock market study. 

Synopsys, Inc. (NasdaqGS:SNPS) has a Price to Book ratio of 3.502095. This ratio is calculated by dividing the current share price by the book value per share. Investors may use Price to Book to display how the market portrays the value of a stock. Checking in on some other ratios, the company has a Price to Cash Flow ratio of 20.068300, and a current Price to Earnings ratio of 36.400644. The P/E ratio is one of the most common ratios used for figuring out whether a company is overvalued or undervalued.

Checking in on some valuation rankings, Synopsys, Inc. (NasdaqGS:SNPS) has a Value Composite score of 61. Developed by James O’Shaughnessy, the VC score uses five valuation ratios. These ratios are price to earnings, price to cash flow, EBITDA to EV, price to book value, and price to sales. The VC is displayed as a number between 1 and 100. In general, a company with a score closer to 0 would be seen as undervalued, and a score closer to 100 would indicate an overvalued company. Adding a sixth ratio, shareholder yield, we can view the Value Composite 2 score which is currently sitting at 56.

Watching some historical volatility numbers on shares of Synopsys, Inc. (NasdaqGS:SNPS), we can see that the 12 month volatility is presently 16.636700. The 6 month volatility is 13.142400, and the 3 month is spotted at 13.653100. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period. 

Price Index
We can now take a quick look at some historical stock price index data. Synopsys, Inc. (NasdaqGS:SNPS) presently has a 10 month price index of 1.34735. The price index is calculated by dividing the current share price by the share price ten months ago. A ratio over one indicates an increase in share price over the period. A ratio lower than one shows that the price has decreased over that time period. Looking at some alternate time periods, the 12 month price index is 1.33629, the 24 month is 1.66056, and the 36 month is 1.93196. Narrowing in a bit closer, the 5 month price index is 1.11845, the 3 month is 1.04821, and the 1 month is currently 1.03866.

The Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years. The score is a number between one and one hundred (1 being best and 100 being the worst). The Gross Margin Score of Synopsys, Inc. (NasdaqGS:SNPS) is 1.00000. The more stable the company, the lower the score. If a company is less stable over the course of time, they will have a higher score.

By Journal Contributor