Is Synopsys, Inc. overvalued or undervalued?

As of 7 November 2025, the valuation grade for Synopsys, Inc. has moved from very expensive to expensive. The company appears to be overvalued based on its current metrics. Key ratios include a P/E ratio of 56, an EV to EBITDA of 42.37, and a Price to Book Value of 7.81, all of which are significantly higher than its peers, such as Microsoft Corp. with a P/E of 36.17 and Oracle Corp. with a P/E of 51.69.
In comparison to the broader market, Synopsys has underperformed against the S&P 500, with a year-to-date return of -18.94% compared to the index's 14.40%. This trend of underperformance is further highlighted by its one-year return of -31.41% versus the S&P 500's 12.65%, reinforcing the notion that the stock is currently overvalued.