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Valued at a market cap of $77.5 billion, Synopsys, Inc. (SNPS) provides electronic design automation software products used to design and test integrated circuits, also known as chips or silicon. Headquartered in Sunnyvale, California, the company operates in two segments: Design Automation and Design IP.
Shares of SNPS have underperformed the broader market over the past 52 weeks. SNPS has dropped 12.3% over this period, while the broader S&P 500 Index ($SPX) has gained 9.8%. However, shares of SNPS are up 3.3% on a YTD basis, outpacing SPX’s marginal dip during the same time frame.
Looking closer, Synopsys has also lagged behind the Technology Select Sector SPDR ETF Fund’s (XLK) 6.8% rise over the past 52 weeks.
Synopsys’ stock fell 3.4% following the release of its mixed Q1 2025 on Feb. 26. The company reported quarterly revenue of $1.5 billion, down 3.7% year-over-year, primarily due to a decline in the Design IP segment. However, the figure still surpassed the analysts’ estimate. Adjusted EPS came in at $3.03, representing a 10.4% decrease from the prior-year quarter, but exceeded the consensus estimate of $2.81.
Looking ahead to fiscal 2025, SNPS expects revenue to be in the range of $6.75 billion to $6.81 billion, with adjusted EPS projected between $10.09 and $10.31.
For the fiscal year ending in October 2025, analysts expect SNPS’ adjusted EPS to increase 4.4% year-over-year to $10.70. The company's earnings surprise history is solid. It beat the consensus estimates in the past four quarters.
Among the 18 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and two “Holds.”
On May 20, KeyBanc Capital Markets analyst Jason Celino raised SNPS’ price target to $575 while maintaining an “Overweight” rating on the stock.
As of writing, Synopsys is trading below the mean price target of $597.55. The Street-high price target of $685 implies a potential upside of a notable 36.6% from the current price levels.
