Synopsys (SNPS) Could Be 20% Undervalued After Ansys Deal And AI Upgrades

Recent analyst upgrades and higher earnings expectations have pushed Synopsys (SNPS) into the spotlight after the company completed its acquisition of Ansys and expanded its role in AI driven engineering and chip design.

Recent moves in Synopsys share price have been choppy, with the stock down 4.6% on the day to about $467.90. It is still showing a 7.6% 30‑day share price return and a 20.4% gain over 90 days as investors react to the Ansys deal and stronger AI positioning.

Scan other AI driven chip and engineering plays showing similar momentum to Synopsys using our curated list of 54 AI infrastructure stocks.

Synopsys now controls a broad, AI heavy engineering platform and carries a market value near US$94b after a strong multi month run. Does that business quality still line up with a sensible entry price today?

Most Popular Narrative: 20% Undervalued

Synopsys last closed at $467.90, while the most followed narrative pegs fair value around $584, which points to a clear gap that investors are trying to explain. That story leans heavily on AI heavy design tools, the Ansys integration and a remodelled earnings profile built around subscriptions, royalties and cost efficiencies.

The acquisition and integration of Ansys positions Synopsys as the global leader in engineering solutions from silicon to systems, and new data showing Q3 FY26 Ansys revenue of about US$711 million and an expected FY26 contribution of about US$2.98 billion supports the view that this expanded portfolio can continue to influence top line growth and operating earnings as cross sell opportunities scale.

See why 171 investors see Synopsys as 20% undervalued.

Result: Fair Value of $583.99 (UNDERVALUED)

Still, the Synopsys narrative can shift quickly if Ansys integration delays keep restructuring costs elevated, or if IP and China exposed revenue underperform current analyst frameworks.

Find out about the key risks to this Synopsys narrative.

Another View: What Multiples Say About Synopsys

On one hand, Synopsys screens as about 19.9% below the SWS fair value estimate based on future cash flows. On the other, the stock trades on a P/E of 83.3x compared with a fair ratio of 48.4x, the peer average of 32.6x and the US Software industry on 31.2x. That kind of premium can signal confidence in Synopsys or simply raise the bar for future execution. Which story do you think the market is really pricing in?

See what the numbers say about this price and how they compare to peers in our valuation breakdown, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Sentiment around Synopsys is clearly split, and that kind of tension rarely lasts for long before the data forces a verdict. Act quickly, review the full picture of both concern and optimism, and weigh those 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Synopsys?

If Synopsys has your attention, do not stop here. Broaden your watchlist with fresh opportunities that match different risk levels, income needs, and quality filters.

• Target potential mispricing by reviewing companies on our curated list of 33 high quality undervalued stocks.
• Strengthen your income stream by scanning for payout heavy candidates featured in our collection of 5 dividend fortresses.
• Dial down portfolio risk by focusing on sturdier businesses highlighted in our 29 resilient stocks with low risk scores.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com