SNPS
Synopsys, Inc.
$393.84
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 266.2% above fair value
You pay
$393.84
Bear
$50.91
Fair
$107.55
Bull
$168.91
Bear
$50.91
-87.1%
8% stage 1 growth, 11% discount
Fair
$107.55
-72.7%
14% stage 1 growth, 11% discount
Bull
$168.91
-57.1%
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
78.3x
Market is pricing in (growth)
27.2%
vs 13.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (29 analysts)
$554.22
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 $107.55 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 $554.22 (from 29 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