In case you haven't heard, Synopsys (SNPS 1.95%) stock got destroyed yesterday. The software-for-semiconductor design company tumbled 36% in Wednesday trading after missing on fiscal Q3 2025 earnings and forecasting an even bigger miss for fiscal Q4.
Wall Street took Synopsys stock to the proverbial woodshed, with at least four separate investment banks downgrading the stock, and a half dozen others cutting price targets (according to data from The Fly). But after all the lamenting and gnashing of teeth, other analysts are giving Synopsys stock a second look today, and the stock is up 11.5% through 2:40 p.m. ET.
One analyst, it seems, thinks Synopsys stock is a buy.
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What Mizuho says about Synopsys stock
In a bit of a backhanded compliment today, Mizuho lowered its price target on Synopsys stock to $600. But seeing as Synopsys only costs about $430 and change right now, Mizuho nevertheless insisted the stock's sudden decline presents investors with a buying opportunity.
"Fiscal 2026 is a transition year for Synopsys," reports The Fly, but Mizuho "remains confident in management's ability to sustain growth in simulation while focusing on profitability and debt reduction."
Is Synopsys stock a buy?
I disagree.
Not on the company's ability to keep growing, to pay down debt, and to focus on profitability -- but simply on the idea that Synopsys stock is cheap enough to buy.
Even after its dramatic decline yesterday, Synopsys stock still sells for 36 times earnings, and a staggering 55 times trailing free cash flow. That's way more than any investor should pay for a stock that, according to analysts polled by S&P Global Market Intelligence, is only growing earnings at about 13% annually over the next five years.
Synopsys stock, I fear, has farther to fall. It's not yet a buy.
