An independent two-stage DCF analysis by a frontier AI model.
"> Derived mathematically from the 4-year historical Free Cash Flow compound annual growth rate (CAGR), bounded to a maximum of 18% to ensure we do not linearly project temporary massive windfalls indefinitely.
"> Calculated using CAPM: Risk-Free Rate of 4.18% (10Y Treasury), plus Synopsys's Beta (1.16) multiplied by an assumed 5.5% Equity Risk Premium.
"> Calculated as the 10Y Treasury rate minus 1%, capping long-term perpetual growth below macroeconomic nominal rates.
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 2.2% | 2.7% | 3.2% | 3.7% | 4.2% |
|---|---|---|---|---|---|
| 2.2% | $9.25 | $8.00 | $7.05 | $6.30 | $5.69 |
| 2.7% | $10.03 | $8.58 | $7.49 | $6.65 | $5.98 |
| 3.2% | $10.96 | $9.25 | $8.00 | $7.05 | $6.30 |
| 3.7% | $12.08 | $10.03 | $8.58 | $7.49 | $6.65 |
| 4.2% | $13.45 | $10.96 | $9.25 | $8.00 | $7.05 |
■ Undervalued vs current price ■ Overvalued vs current price
Synopsys holds a formidable position in the electronic design automation (EDA) software market, buoyed by deep integration into chip designers' workflows. This creates remarkably high switching costs and robust pricing power, reinforcing its standing as the 12th largest software company. However, high valuation multiples leave little room for error. The growing complexity of semiconductor design and AI-driven workflows are key tailwinds.
Synopsys enjoys robust revenue growth outstripping many peers and strong pricing power within a critical industry niche.
The company possesses a wide moat characterized by immense switching costs and a highly consolidated market structure.
Sentiment is generally positive due to AI tailwinds, though high valuation and regulatory hurdles present risks.
Westmount Research. "Synopsys (SNPS) Intrinsic Value: A DCF Analysis." westmountfundamentals.com, 2026-03-24.
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.