Investors apparently forgave Synopsys for an outlier quarter last year, and are focused on its sales and profit gains this year. Synopsys stock rose further above its 21-day average Thursday, ahead of its earnings report due in early September.
Reflecting the computer software design company's strength, Synopsys stock got a positive improvement to its Relative Strength (RS) Rating on Thursday, with an increase from 80 to 84. The RS Rating upgrade shows the stock is in the top 16% of all stocks for price performance this past year.
Synopsys Also Has A Terrific Composite Rating
Synopsys makes software that semiconductor makers use to design their chips. The explosion of artificial intelligence chip designs and systems is lifting Synopsys and other AI-focused tech companies.
Among its other ratings Synopsys has a 91 EPS Rating out of 99, a 96 Composite Rating and a B+ Accumulation/Distribution Rating, a gauge of institutional buying. The B+ rating shows that mutual funds, insurance company funds and the like are fairly heavy buyers of its stock.
Hone Your Stock-Picking Skills By Focusing On These Factors
Synopsys stock shot up from a low of 365.74 on April 7 to an all-time high 651.73 on July 30. It's consolidated since then and is now considered extended and out of buy range. It earlier cleared a 573.77 buy point in a second-stage cup-without-handle pattern. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks-tight or pullback to the 50-day or 10-week moving average.
Synopsys earnings grew 22% last quarter, to $3.67 per share. That was up from a 10% drop in EPS in the prior report. However, for the two reports prior to that, its EPS climbed 27% and 13%.
Ranks No. 3 In Its Industry
Revenue last quarter rose 10% to $1.6 billion. Sales followed the same pattern as EPS. The prior quarter saw a 4% dip, but the two quarters before that it recorded revenue gains of 13% and 11% before returning to double-digit growth last quarter. The company says on its website it will announce third quarter results the afternoon of Sept. 9.
Synopsys earns the No. 3 rank among its peers in the 10-stock Computer Software-Design industry group. Cadence Design Systems is the top-ranked stock in the group.
IBD's proprietary RS Rating tracks technical performance by showing how a stock's price movement over the last 52 weeks measures up against that of the other stocks in our database.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
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