Is Synopsys, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Synopsys, Inc. has moved from attractive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, as reflected by its P/E ratio of 56, which is substantially higher than its peer Microsoft Corp. at 36.17 and Oracle Corp. at 51.69. Additionally, Synopsys has an EV to EBITDA ratio of 42.37, which also surpasses the industry norms, further supporting the overvaluation assessment.
In comparison to its peers, Synopsys, Inc. stands out with a notably high P/E ratio of 83.16, while ServiceNow, Inc. is also categorized as very expensive with a P/E of 117.63. The company's recent stock performance shows a year-to-date return of -7.77%, significantly lagging behind the S&P 500's return of 13.30%, which reinforces the notion that the stock may be overvalued at its current price of 447.64.