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Synopsys, Inc. (SNPS), based in California, is a renowned provider of electronic design automation (EDA) software for the semiconductor and electronics industries. It also offers a comprehensive suite of tools for chip design, including logic synthesis, functional verification, and physical design. Its market cap currently stands at $76.9 billion. Synopsys is scheduled to release its fiscal 2024 Q4 earnings results on Dec. 4.
Ahead of the event, analysts expect Synopsys to report a profit of $2.41 per share, up 6.6% from $2.26 per share in the year-ago quarter. The company has exceeded Wall Street’s EPS estimates in each of the last four quarters. Its EPS of $2.54 for the last reported quarter surpassed the consensus estimate by 7.2%.
Wall Street expects Synopsys to report an EPS of $9.45 in fiscal 2024, up 19.3% from $7.92 in fiscal year 2023.
Over the past 52 weeks, SNPS stock has surged 10.2%, trailing behind the broader S&P 500 Index's ($SPX) 38.7% gains and the Technology Select Sector SPDR Fund’s (XLK) 41% returns during the same period.
Despite weak market performance, accelerating design cycles and growing chip complexity present promising trends for Synopsys. Besides, AI is spurring demand for high-performance computing across data centers, smartphones, and PCs, driving the need for increasingly complex chipsets—developments that are likely to boost the company's business volumes.
On Aug. 21, SNPS reported its Q3 earnings results, and its shares rose more than 1% in the following trading session. Its revenue stood at $1.5 billion, up 12.7% year over year. The company’s adjusted EPS of $3.43 was greater than the consensus of $3.28. Management anticipates strong momentum, projecting a 15% year-over-year revenue increase for fiscal 2024, setting a new record. The company’s long-term goals include sustaining double-digit revenue growth, achieving free cash flow margins in the mid-30% range, and reaching earnings per share growth in the mid-teens.
The current consensus opinion on Synopsys stock is “Strong Buy” overall. Out of 15 analysts covering the stock, 13 suggest a “Strong Buy,” one advocates a “Moderate Buy,” and the remaining analyst advises a “Hold.” This consensus is more bullish than a month ago when 11 analysts gave the stock a “Strong Buy.”
The average price target for Synopsys is $648.53, indicating a potential upside of 29.3% from the current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
