MeritValue

SYNOPSYS INC

SNPSdata completeness 100%18 fiscal years on file
The thesis, from the filings

SYNOPSYS INC earns about 20% on invested capital, but has diluted owners by 5% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $76.94 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$4.2B1$4.62B2$5.32B3$6.13B3$7.05B3
Net income$757.5M4$984.6M5$1.23B6$2.26B6$1.33B6
Operating cash flow$1.49B7$1.74B8$1.7B9$1.41B9$1.52B9
Capital expenditure$93.8M10$136.6M11$189.6M12$139.5M12$169.5M12
Free cash flow (derived)$1.4B7$1.6B8$1.51B9$1.27B9$1.35B9
Total debt$100.1M13$20.8M14$18.1M15$15.6M16$27B16
Cash & equivalents$1.43B17$1.42B18$1.43B19$3.9B20$2.89B20
Diluted shares157.3M156.5M155.2M155.9M165.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$1,710.03
your share of equity
Profit it earned you last year
$80.42
Free cash flow it threw off
$81.44
Debt you’d be carrying
$1,628.01

10 shares is a claim on $1,710.03 of net worth that earned you $80.42 and generated $81.44 of cash last year, against $1,628.01 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
20% avg · 5y
FY21 19%FY22 23%FY23 26%FY24 28%FY25 3%

It earned an average 20% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+5% shares · 5y

Share count is up 5% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 26846% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$1.35B
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$1.35B
Earnings Power Value
$76.94
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.23B
  • growthAssumed0.0%
Graham Number
$175.88
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-10-31 · accession 0000883241-23-000019 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-10-31 · accession 0000883241-24-000024 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-10-31 · accession 0000883241-25-000028 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-10-31 · accession 0000883241-23-000019 (NetIncomeLoss)
  5. 10-K · period ending 2022-10-31 · accession 0000883241-24-000024 (NetIncomeLoss)
  6. 10-K · period ending 2023-10-31 · accession 0000883241-25-000028 (NetIncomeLoss)
  7. 10-K · period ending 2021-10-31 · accession 0000883241-23-000019 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-10-31 · accession 0000883241-24-000024 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-10-31 · accession 0000883241-25-000028 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-10-31 · accession 0000883241-23-000019 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-10-31 · accession 0000883241-24-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-10-31 · accession 0000883241-25-000028 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-10-31 · accession 0000883241-22-000017 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-10-31 · accession 0000883241-23-000019 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-10-31 · accession 0000883241-24-000024 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-10-31 · accession 0000883241-25-000028 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-10-31 · accession 0000883241-22-000017 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-10-31 · accession 0000883241-23-000019 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-10-31 · accession 0000883241-24-000024 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-10-31 · accession 0000883241-25-000028 (CashAndCashEquivalentsAtCarryingValue)