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Valued at more than $60 billion by market cap, Sunnyvale, California-based Synopsys, Inc. (SNPS) delivers trusted and comprehensive silicon-to-systems design solutions, from electronic design automation to silicon IP and system verification and validation.
The tech giant is expected to announce its second-quarter results on Wednesday, May 28. Ahead of the event, analysts expect SNPS to report an adjusted EPS of $2.40, marking a 12.2% increase from $2.14 reported in the year-ago quarter. Moreover, the company has surpassed the Street’s bottom-line estimates in each of the past four quarters.
For the full fiscal 2025, SNPS is expected to report an adjusted EPS of $10.70, up 4.4% from $10.25 reported in fiscal 2024. While in fiscal 2026, its earnings are expected to further surge 19.8% year-over-year to $12.82 per share.
SNPS stock has plunged 18.3% over the past 52 weeks, notably underperforming the S&P 500 Index’s ($SPX) 8.4% gains and the Technology Select Sector SPDR Fund’s (XLK) 4.2% uptick during the same time frame.
Despite delivering better-than-expected financials, Synopsys’ stock prices declined 3.4% in the trading session after the release of its Q1 results on Feb. 26. While the company’s total revenues of $1.46 billion exceeded Street’s expectations, it was down 3.7% compared to the year-ago quarter. Synopsys’ revenues were primarily impacted due to the softness in the macro environment, which led to a 17.2% decline in its Design IP segment’s revenues to $435.1 million.
Meanwhile, the company observed a notable surge in general & admin and other expenses, which led to an even sharper decline in earnings. Its net income for the quarter tanked 34.2% year-over-year to $295.7 million. Furthermore, the company reported a negative $67.5 million cash flow from operations and reduced its full-year GAAP-based earnings guidance, which shattered investor confidence.
Nonetheless, the consensus view on SNPS remains optimistic, with a “Strong Buy” rating overall. Of the 18 analysts covering the stock, opinions include 15 “Strong Buys,” one “Moderate Buy,” and two “Holds.” Its mean price target of $601.44 suggests a 35.5% upside potential from current price levels.
On the date of publication, Aditya Sarawgi 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.
