The most recent trading session ended with Synopsys (SNPS) standing at $551.54, reflecting a +1.26% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily gain of 0.53%. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.22%.

Shares of the maker of software used to test and develop chips witnessed a gain of 8.91% over the previous month, beating the performance of the Computer and Technology sector with its gain of 3.02% and the S&P 500's gain of 2.69%.

The investment community will be paying close attention to the earnings performance of Synopsys in its upcoming release. The company is forecasted to report an EPS of $2.81, showcasing a 21.07% downward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.45 billion, down 11.9% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $14.90 per share and a revenue of $6.77 billion, indicating changes of +12.88% and +8.04%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for Synopsys. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. As of now, Synopsys holds a Zacks Rank of #3 (Hold).

With respect to valuation, Synopsys is currently being traded at a Forward P/E ratio of 36.56. This represents a premium compared to its industry's average Forward P/E of 31.4.

Also, we should mention that SNPS has a PEG ratio of 2.55. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Computer - Software stocks are, on average, holding a PEG ratio of 2.46 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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