Synopsys, Inc. (NASDAQ:SNPS) shares are trading lower Wednesday after the company reported worse-than-expected financial results and issued fourth quarter adjusted earnings per share guidance below estimates on Tuesday after the market closed. Also, the company cut its fiscal-year 2025 adjusted earnings per share guidance below estimates.
What To Know: Synopsys reported adjusted earnings per share of $3.39, missing the consensus estimate of $3.74. In addition, the company reported sales of $1.73 billion, missing the consensus estimate of $1.76 billion, but representing a 14% year-over-year increase.
The company said the increase reflected strength in its design automation segment but softer performance in its design IP unit. Results also included contributions from the recently closed Ansys acquisition, which expanded Synopsys' portfolio and customer base.
Q4 Outlook: The company sees adjusted earnings per share between $2.76 and $2.80, versus the consensus estimate of $4.51. In addition, it sees sales between $2.23 billion and $2.26 billion, versus the consensus estimate of $2.09 billion.
FY25 Outlook: Synopsys lowered its adjusted earnings per share from between $15.11 to $15.19 to between $12.76 and $12.80, versus the consensus estimate of $15.00. Furthermore, it raised its sales guidance from between $6.74 billion to $6.80 billion to between $7.03 billion to $7.06 billion, versus the consensus estimate of $6.90 billion.
Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments.
- Piper Sandler analyst Clarke Jeffries maintained an Overweight rating on Synopsys and lowered the price target from $660 to $630.
- Needham analyst Charles Shi maintained a Buy rating on Synopsys and lowered the price target from $660 to $550.
- Rosenblatt analyst Blair Abernethy downgraded Synopsys from a Buy rating to a Neutral rating and lowered the price target from $650 to $605.
- Baird analyst Joe Vruwink downgraded Synopsys from an Outperform rating to a Neutral rating and lowered the price target from $670 to $535.
- JP Morgan analyst Harlan Sur maintained an Overweight rating on Synopsys and lowered the price target from $685 to $600.
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SNPS Price Action: At the time of writing, Synopsys shares are trading 35.61% lower at $389.01, according to data from Benzinga Pro.
This illustration was generated using artificial intelligence via Midjourney.
