In the fast-evolving technology sector, Synopsys, Inc. (SNPS) and Gen Digital Inc. (GEN) stand out as key players in software infrastructure. Synopsys excels in electronic design automation and integrated circuit testing, while Gen Digital focuses on consumer cyber safety and identity protection. Both companies innovate to secure digital futures, making them worthy of comparison. This article will help you decide which company fits best in your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between Synopsys and Gen Digital by providing an overview of these two companies and their main differences.
Synopsys Overview
Synopsys, Inc. specializes in electronic design automation software, focusing on integrated circuit design and testing. Its offerings include digital design implementation, verification, FPGA design, and intellectual property solutions across various technologies. The company serves sectors such as electronics, automotive, medicine, and industrial markets, maintaining a leading position with a market cap near $99B and employing around 20,000 staff.
Gen Digital Overview
Gen Digital Inc. delivers cybersecurity and privacy solutions aimed at consumers worldwide. Its product suite includes Norton 360, LifeLock identity protection, VPN services, and privacy management tools. The company operates through multiple channels including retailers and telecom providers. With a market cap of approximately $16B, Gen Digital employs about 3,400 people and focuses on safeguarding digital identities and online privacy across several regions.
Key similarities and differences
Both companies operate in the technology sector within software infrastructure but target distinct markets. Synopsys focuses on high-tech design software and semiconductor IP for industrial applications, while Gen Digital concentrates on consumer cyber safety solutions. Synopsys is significantly larger in market capitalization and workforce, reflecting its broad industrial reach versus Gen Digital’s consumer-oriented cybersecurity niche.
Income Statement Comparison
This table compares key income statement metrics for Synopsys, Inc. and Gen Digital Inc. for their most recent fiscal year, providing a snapshot of their financial performance.
| Metric | Synopsys, Inc. (SNPS) | Gen Digital Inc. (GEN) |
|---|---|---|
| Market Cap | 98.8B | 16.1B |
| Revenue | 7.05B | 3.94B |
| EBITDA | 2.50B | 2.03B |
| EBIT | 1.84B | 1.61B |
| Net Income | 1.33B | 643M |
| EPS | 8.13 | 1.04 |
| Fiscal Year | 2025 | 2025 |
Income Statement Interpretations
Synopsys, Inc.
Synopsys demonstrated strong revenue growth from 2021 to 2025, with a 67.8% increase and net income rising 75.9%. Gross and EBIT margins remained favorable, around 77% and 26% respectively. Despite a solid 15.1% revenue increase in 2025, net margin and EPS declined sharply, signaling margin pressure despite overall growth.
Gen Digital Inc.
Gen Digital’s revenue increased steadily by 54.3% from 2021 to 2025, with net income growth more modest at 16.1%. The company maintained high gross margin of 80.3% and a robust EBIT margin near 40.8%. The latest year showed slower revenue growth of 3.6%, but EBIT and EPS growth remained favorable, indicating operational efficiency improvements.
Which one has the stronger fundamentals?
Synopsys shows stronger long-term revenue and net income growth with solid profitability margins, though recent margin compression is a concern. Gen Digital maintains higher margins and improved operational efficiency with steadier recent growth, despite a weaker net income increase overall. Both companies have favorable income statement evaluations, reflecting solid fundamentals with different risk and growth profiles.
Financial Ratios Comparison
The table below presents a side-by-side comparison of Synopsys, Inc. (SNPS) and Gen Digital Inc. (GEN) based on their most recent fiscal year ratios, highlighting key financial metrics for 2025.
| Ratios | Synopsys, Inc. (SNPS) FY 2025 | Gen Digital Inc. (GEN) FY 2025 |
|---|---|---|
| ROE | 4.72% | 28.34% |
| ROIC | 1.97% | 7.77% |
| P/E | 54.36 | 25.36 |
| P/B | 2.57 | 7.19 |
| Current Ratio | 1.62 | 0.51 |
| Quick Ratio | 1.52 | 0.51 |
| D/E (Debt-to-Equity) | 0.50 | 3.66 |
| Debt-to-Assets | 29.6% | 53.7% |
| Interest Coverage | 2.05 | 2.79 |
| Asset Turnover | 0.15 | 0.25 |
| Fixed Asset Turnover | 5.04 | 36.10 |
| Payout Ratio | 0% | 48.7% |
| Dividend Yield | 0% | 1.92% |
Interpretation of the Ratios
Synopsys, Inc.
Synopsys shows a balanced ratio profile with favorable net margin (18.96%) and solid liquidity ratios (current ratio 1.62, quick ratio 1.52). However, weaknesses include low return on equity (4.72%), return on invested capital (1.97%), and a high price-to-earnings ratio (54.36). The company does not pay dividends, reflecting a strategy likely focused on reinvestment and growth.
Gen Digital Inc.
Gen Digital has strong profitability ratios, including a high return on equity of 28.34% and a favorable net margin of 16.34%. Nevertheless, it faces challenges such as poor liquidity (current and quick ratios at 0.51) and elevated leverage (debt-to-equity 3.66). The dividend yield stands at 1.92%, suggesting some shareholder returns amid these constraints.
Which one has the best ratios?
Synopsys presents a more balanced liquidity and leverage profile with fewer unfavorable ratios, while Gen Digital excels in profitability but struggles with liquidity and debt levels. Considering the ratio evaluations, Synopsys holds a neutral overall stance, whereas Gen Digital’s ratios are slightly unfavorable due to its financial structure.
Strategic Positioning
This section compares the strategic positioning of Synopsys and Gen Digital, including market position, key segments, and exposure to technological disruption:
Synopsys, Inc.
- Leading software infrastructure provider with strong market cap and moderate competitive pressure.
- Focuses on electronic design automation, IP solutions, and SoC infrastructure; serves diverse industries.
- Faces disruption from evolving semiconductor design technologies and security testing innovations.
Gen Digital Inc.
- Cyber safety provider with smaller market cap and competitive pressure from multiple regions.
- Concentrated on consumer cyber safety products like Norton 360 and identity theft protection.
- Exposed to cyber threats evolution, requiring constant updates to security and privacy solutions.
Synopsys vs Gen Digital Positioning
Synopsys adopts a diversified approach with broad industry coverage in semiconductor software design, whereas Gen Digital concentrates on consumer cybersecurity services. Synopsys’s scale offers resilience, while Gen Digital targets niche cyber safety markets with focused product offerings.
Which has the best competitive advantage?
Both companies show declining profitability with ROIC below WACC, indicating value destruction. Neither currently demonstrates a strong economic moat or sustainable competitive advantage based on recent MOAT evaluations.
Stock Comparison
The stock price chart highlights contrasting trajectories over the past year, with Synopsys, Inc. experiencing a notable decline and Gen Digital Inc. showing a moderate rise, both marked by distinct trading volume patterns and trend dynamics.
Trend Analysis
Synopsys, Inc. (SNPS) shows a bearish trend over the past 12 months with a -10.31% price change and accelerating downward momentum, fluctuating between 388.13 and 621.3, accompanied by high volatility (std deviation 58.85).
Gen Digital Inc. (GEN) exhibits a bullish trend over the same period, gaining 17.89%, though with decelerating momentum and low volatility (std deviation 2.59), trading between 20.03 and 31.58.
Comparing both, GEN delivered the highest market performance over the year, outperforming SNPS which faced a significant price decline despite recent short-term gains.
Target Prices
Here is the consensus target price overview for Synopsys, Inc. and Gen Digital Inc. from verified analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Synopsys, Inc. | 600 | 425 | 530 |
| Gen Digital Inc. | 32 | 31 | 31.5 |
Analysts expect Synopsys shares to appreciate modestly above the current price of $516.31, while Gen Digital’s consensus target price of $31.5 suggests potential upside from its current $26.10 market price.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Synopsys, Inc. and Gen Digital Inc.:
Rating Comparison
Synopsys, Inc. Rating
- Rating: B- indicating a very favorable standing
- Discounted Cash Flow Score: 3, moderate valuation outlook
- ROE Score: 3, moderate profitability efficiency
- ROA Score: 3, moderate asset utilization
- Debt To Equity Score: 2, moderate financial risk
- Overall Score: 3, moderate overall financial standing
Gen Digital Inc. Rating
- Rating: B indicating a very favorable standing
- Discounted Cash Flow Score: 5, very favorable valuation
- ROE Score: 5, very favorable profitability efficiency
- ROA Score: 3, moderate asset utilization
- Debt To Equity Score: 1, very unfavorable financial risk
- Overall Score: 3, moderate overall financial standing
Which one is the best rated?
Gen Digital holds a higher rating (B vs. B-) with very favorable scores in discounted cash flow and return on equity, while Synopsys maintains moderate scores with slightly better debt management. Overall scores are equal.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Synopsys and Gen Digital:
SNPS Scores
- Altman Z-Score: 3.54, in the safe zone, low bankruptcy risk
- Piotroski Score: 4, average financial strength
GEN Scores
- Altman Z-Score: 1.25, in the distress zone, high bankruptcy risk
- Piotroski Score: 6, average financial strength
Which company has the best scores?
Synopsys has a much stronger Altman Z-Score, indicating better financial stability. Gen Digital has a higher Piotroski Score, but both remain in the average range. Overall, Synopsys shows lower bankruptcy risk compared to Gen Digital.
Grades Comparison
Here is the comparison of recent grades assigned to Synopsys, Inc. and Gen Digital Inc. by various reputable grading firms:
Synopsys, Inc. Grades
The following table summarizes recent analyst grades for Synopsys, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Downgrade | Neutral | 2026-01-13 |
| Morgan Stanley | Maintain | Overweight | 2025-12-12 |
| Rosenblatt | Maintain | Buy | 2025-12-11 |
| Keybanc | Maintain | Overweight | 2025-12-11 |
| Piper Sandler | Maintain | Overweight | 2025-12-11 |
| Needham | Maintain | Buy | 2025-12-11 |
| B of A Securities | Upgrade | Buy | 2025-12-11 |
| JP Morgan | Maintain | Overweight | 2025-12-11 |
| Wells Fargo | Maintain | Equal Weight | 2025-12-11 |
| Rosenblatt | Upgrade | Buy | 2025-12-09 |
Overall, grades for Synopsys mostly cluster around “Buy” and “Overweight,” with a recent downgrade to “Neutral” by Piper Sandler.
Gen Digital Inc. Grades
The following table presents recent analyst grades for Gen Digital Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2025-11-07 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-02 |
| Barclays | Maintain | Equal Weight | 2025-08-08 |
| Wells Fargo | Maintain | Overweight | 2025-08-08 |
| RBC Capital | Maintain | Sector Perform | 2025-08-08 |
| Barclays | Maintain | Equal Weight | 2025-07-14 |
| RBC Capital | Maintain | Sector Perform | 2025-05-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-04-16 |
| RBC Capital | Maintain | Sector Perform | 2025-01-31 |
Grades for Gen Digital consistently indicate a moderate stance, mostly “Equal Weight” or “Sector Perform,” with a single “Outperform.”
Which company has the best grades?
Synopsys, Inc. has received generally stronger analyst grades, with a majority of “Buy” and “Overweight” ratings compared to Gen Digital’s predominantly neutral “Equal Weight” and “Sector Perform” grades. This suggests investors may perceive Synopsys as having higher growth potential or better fundamentals, which could influence portfolio allocation decisions accordingly.
Strengths and Weaknesses
Below is a comparative overview of key strengths and weaknesses for Synopsys, Inc. (SNPS) and Gen Digital Inc. (GEN) based on the latest data.
| Criterion | Synopsys, Inc. (SNPS) | Gen Digital Inc. (GEN) |
|---|---|---|
| Diversification | Moderate – mainly License and Maintenance, Technology Services | Focused – primarily Cyber Safety with some Legacy products |
| Profitability | Moderate net margin 18.96%, but low ROIC (1.97%) and declining value creation | Good net margin 16.34%, high ROE 28.34%, but slightly unfavorable overall due to declining ROIC |
| Innovation | Strong product and technology service revenues; steady investment in innovation | Strong Cyber Safety segment growth, but legacy products declining |
| Global presence | Well-established global footprint in semiconductor EDA and IP | Global in cybersecurity, but financial ratios suggest operational challenges |
| Market Share | Leading in electronic design automation, but facing profitability erosion | Significant presence in consumer cybersecurity with expanding product lines |
Key takeaways: Both companies show strengths in their core sectors but are currently facing profitability challenges with declining ROIC trends. Synopsys maintains strong revenues in licensing, while Gen Digital shows robust returns on equity despite some financial weaknesses. Investors should monitor their ability to reverse declining profitability.
Risk Analysis
Below is a comparative table summarizing key risks for Synopsys, Inc. (SNPS) and Gen Digital Inc. (GEN) based on the most recent 2025 data:
| Metric | Synopsys, Inc. (SNPS) | Gen Digital Inc. (GEN) |
|---|---|---|
| Market Risk | Beta 1.12 – moderate volatility | Beta 1.08 – moderate volatility |
| Debt level | Debt/Equity 0.5 – moderate | Debt/Equity 3.66 – high leverage |
| Regulatory Risk | Moderate – tech industry focused | Moderate to high – cybersecurity sector with privacy regulations |
| Operational Risk | Moderate – large workforce (20K), complex product suite | Moderate – smaller team (3.4K), reliance on subscription model |
| Environmental Risk | Low – software industry | Low – software & cybersecurity |
| Geopolitical Risk | Low to moderate – global supply chains and IP exposure | Moderate – international customer base and data privacy laws |
Synopsys shows moderate market risk with balanced debt and solid liquidity, but faces challenges in return on equity and asset efficiency. Gen Digital has higher financial risk due to significant leverage and weaker liquidity, increasing vulnerability to interest costs. Regulatory risk is notable for Gen given evolving cybersecurity and data privacy laws. Overall, debt levels and regulatory environment pose the most impactful risks, especially for Gen Digital.
Which Stock to Choose?
Synopsys, Inc. (SNPS) has demonstrated favorable income growth with a 15.12% revenue increase in 2025 and a solid gross margin near 77%. Its profitability is mixed; net margin is strong at 18.89%, but key returns on equity (4.72%) and invested capital (1.97%) are low. Debt metrics are moderate, and the overall financial ratios yield a neutral rating. The company’s rating is very favorable (B-), supported by a safe Altman Z-Score, though its economic moat is very unfavorable due to declining ROIC.
Gen Digital Inc. (GEN) shows steady but slower income growth with 3.55% revenue rise in 2025 and a higher gross margin of 80.28%. Profitability ratios are generally strong, including a 28.34% return on equity and a 7.77% return on invested capital, though debt levels are high and liquidity ratios are unfavorable. Its overall financial ratios are slightly unfavorable, but it holds a very favorable rating (B) with a distressed Altman Z-Score and also a very unfavorable moat due to decreasing profitability.
For investors prioritizing growth and stability in income and profitability metrics, SNPS might appear more attractive given its stronger recent income growth and safer financial distress indicators. Conversely, risk-tolerant investors valuing higher returns on equity and capital employed could see GEN as a potential fit despite its elevated debt and liquidity concerns. Both companies show challenges in sustaining economic value, suggesting caution in assessing their long-term competitive advantages.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Synopsys, Inc. and Gen Digital Inc. to enhance your investment decisions:
