Stock Analysis | Synopsys Outlook - Technical Headwinds and Mixed Analyst Signals

Market Snapshot

Headline: Synopsys faces bearish technical signals amid mixed analyst ratings, while recent news highlights regulatory and strategic shifts in the semiconductor industry.

News Highlights

• US export curbs on chip design software have impacted Synopsys, with the company halting new orders in China to comply with new restrictions. These curbs are part of broader efforts to limit China’s access to advanced AI chip development tools.
• Rivian and Volkswagen Group’s joint venture in software-defined vehicle platforms highlights growing industry interest in next-generation tech, which could indirectly affect Synopsys, as it serves the broader tech and automotive software ecosystems.
• Quest Software’s $350 million capital infusion underscores continued investment in AI-driven growth areas, illustrating broader trends that could influence Synopsys’ long-term market positioning.

Analyst Views & Fundamentals

Average Rating Score: 4.50 (simple mean)

Weighted Rating Score: 2.58 (performance-weighted)

Rating Consistency: Analysts are divided, with one "Strong Buy" and one "Buy" rating in the last 20 days.

Price Trend Alignment: The current stock price has fallen (-3.03%), which aligns with the bearish weighted rating, indicating a moderate disconnect from the average positive analyst sentiment.

• ROE (diluted) YoY growth rate: 5.04% (internal diagnostic score: 3)
• Net income-to-revenue margin: 71.15% (internal diagnostic score: 3)
• Cash-UP: 18.47% (internal diagnostic score: 3)
• ROA: 1.45% (internal diagnostic score: 3)
• Asset-liability ratio: 58.26% (internal diagnostic score: 0)
• Operating cycle: 172.80 days (internal diagnostic score: 0)

Money-Flow Trends

Synopsys is currently experiencing positive overall fund flow, with large and extra-large investors showing the strongest inflows. Specifically:

• Small investor trend: negative, with an inflow ratio of 49.81%
• Medium investor trend: negative, with an inflow ratio of 49.87%
• Large investor trend: positive, with an inflow ratio of 50.50%
• Extra-large investor trend: positive, with an inflow ratio of 62.74%

Despite the bearish technical signals, big-money players are still showing a positive interest in the stock, while retail investors remain cautious.

Key Technical Signals

Synopsys is underperforming technically, with two bearish indicators and weak momentum. Here’s a breakdown of the key signals:

• Williams %R Overbought: Score: 2.71 (internal diagnostic score). This suggests a bearish bias with historically poor performance.
• MACD Death Cross: Score: 1.00 (internal diagnostic score). A strong bearish signal indicating a likely continuation of the downtrend.

Recent Chart Patterns: Over the last five days, we observed one "WR Oversold" signal (August 11, 2025) and multiple "WR Overbought" signals (July 24, 29, 30, 2025), suggesting a volatile but directionless market with bearish dominance.

Overall Trend Insight: Technical indicators show a weak trend with no clear direction. With 2 bearish signals and no bullish ones, the current environment favors avoiding the stock until clarity emerges.

Conclusion

With an internal technical score of 3.3, a fundamental score of 6.84, and a fund-flow score of 7.12, Synopsys is in a mixed situation. While fundamentals and big-money flows look relatively strong, the technical outlook is weak. Given the current price decline of -3.03% and the recent bearish indicators, investors should consider waiting for a clearer trend before entering a position. A pullback could offer a more favorable entry point, especially if fundamentals and market flows remain supportive.