SNPS
Synopsys, Inc.
$451.19
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 319.8% above fair value
You pay
$451.19
Bear
$50.87
Fair
$107.47
Bull
$168.77
Bear
$50.87
-88.7%
8% stage 1 growth, 11% discount
Fair
$107.47
-76.2%
14% stage 1 growth, 11% discount
Bull
$168.77
-62.6%
18% stage 1 growth, 11% discount
Adjust Assumptions
13.9%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
88.3x
Market is pricing in (growth)
28.8%
vs 13.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$575.93
Divergence from AlphaVal
81%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $107.47 per share.
Warnings
Stock-based employee pay equals 67% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $575.93 (from 30 analysts). Our estimate is 81% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions