Synopsys (NASDAQ:SNPS) is set to give its latest quarterly earnings report on Wednesday, 2024-12-04. Here's what investors need to know before the announcement.
Analysts estimate that Synopsys will report an earnings per share (EPS) of $3.30.
The market awaits Synopsys's announcement, with hopes high for news of surpassing estimates and providing upbeat guidance for the next quarter.
It's important for new investors to understand that guidance can be a significant driver of stock prices.
Historical Earnings Performance
During the last quarter, the company reported an EPS beat by $0.15, leading to a 2.94% drop in the share price on the subsequent day.
Here's a look at Synopsys's past performance and the resulting price change:
| Quarter | Q3 2024 | Q2 2024 | Q1 2024 | Q4 2023 |
|---|---|---|---|---|
| EPS Estimate | 3.28 | 3.05 | 3.43 | 3.04 |
| EPS Actual | 3.43 | 3 | 3.56 | 3.17 |
| Price Change % | -3.0% | 2.0% | 7.000000000000001% | -2.0% |
Market Performance of Synopsys's Stock
Shares of Synopsys were trading at $565.93 as of November 29. Over the last 52-week period, shares are up 7.29%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.
Analysts' Perspectives on Synopsys
For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Synopsys.
A total of 6 analyst ratings have been received for Synopsys, with the consensus rating being Buy. The average one-year price target stands at $644.17, suggesting a potential 13.83% upside.
Comparing Ratings with Competitors
The below comparison of the analyst ratings and average 1-year price targets of Cadence Design Sys, MicroStrategy and Atlassian, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.
- The prevailing sentiment among analysts is an Buy trajectory for Cadence Design Sys, with an average 1-year price target of $310.56, implying a potential 45.12% downside.
- Analysts currently favor an Buy trajectory for MicroStrategy, with an average 1-year price target of $347.85, suggesting a potential 38.53% downside.
- For Atlassian, analysts project an Outperform trajectory, with an average 1-year price target of $242.58, indicating a potential 57.14% downside.
Peers Comparative Analysis Summary
Within the peer analysis summary, vital metrics for Cadence Design Sys, MicroStrategy and Atlassian are presented, shedding light on their respective standings within the industry and offering valuable insights into their market positions and comparative performance.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|---|---|---|---|---|
| Synopsys | Buy | 12.65% | $1.24B | 5.49% |
| Cadence Design Sys | Buy | 18.81% | $1.05B | 5.40% |
| MicroStrategy | Buy | -10.34% | $81.72M | -10.30% |
| Atlassian | Outperform | 21.48% | $970.16M | -12.01% |
Key Takeaway:
Synopsys ranks at the top for Revenue Growth and Gross Profit among its peers. However, it ranks at the bottom for Return on Equity. Overall, Synopsys is performing well in terms of revenue and profit growth compared to its peers, but its return on equity is lower.
Get to Know Synopsys Better
Synopsys is a provider of electronic design automation software, intellectual property, and software integrity products. EDA software automates the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. The firm's growing SI business allows customers to continuously manage and test the code base for security and quality. Synopsys' comprehensive portfolio is benefiting from a mutual convergence of semiconductor companies moving up-stack toward systems-like companies, and systems companies moving down-stack toward in-house chip design. The resulting expansion in EDA customers alongside secular digitalization of various end markets benefits EDA vendors like Synopsys.
A Deep Dive into Synopsys's Financials
Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.
Revenue Growth: Synopsys displayed positive results in 3 months. As of 31 July, 2024, the company achieved a solid revenue growth rate of approximately 12.65%. This indicates a notable increase in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Information Technology sector.
Net Margin: Synopsys's net margin surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 26.74% net margin, the company effectively manages costs and achieves strong profitability.
Return on Equity (ROE): Synopsys's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of 5.49%, the company may face hurdles in achieving optimal financial returns.
Return on Assets (ROA): Synopsys's ROA surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 3.6% ROA, the company effectively utilizes its assets for optimal returns.
Debt Management: With a below-average debt-to-equity ratio of 0.09, Synopsys adopts a prudent financial strategy, indicating a balanced approach to debt management.
To track all earnings releases for Synopsys visit their earnings calendar on our site.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
