Is Synopsys, Inc. overvalued or undervalued?

As of 7 November 2025, the valuation grade for Synopsys, Inc. has moved from very expensive to expensive, indicating a shift in its perceived value. The company appears overvalued based on its current metrics, with a P/E ratio of 56, a Price to Book Value of 7.81, and an EV to EBITDA of 42.37. In comparison, peers such as Microsoft Corp. and Oracle Corp. have P/E ratios of 36.17 and 51.69, respectively, suggesting that Synopsys is trading at a premium relative to its industry counterparts.
Recent performance shows that 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 is further highlighted by a one-year return of -31.41% versus the S&P 500's 12.65%, reinforcing the notion that the stock may be overvalued in the current market environment.