Synopsys Inc.  (SNPS) Trade Now »     Rate SNPS  -  Discuss SNPS  -  Add to Watch List        

Synopsys (SNPS): $26.95:

Synopsys has transitioned to a subscription-based revenue model.   With 3-year contracts, SNPS has very strong visibility relative to most technology companies.  The company is expanding margins and has new management in place that has something to prove.  SNPS increased guidance on 11/29 and Mentor Graphics just raised its guidance earlier this week.  Near-term business is healthy. 

The stock  trades at 20x CY07 and 16x CY08.  More importantly, the current price represents ~12x CY07 Free Cash Flow (10x 2008).  This is less than the S&P500.