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Sunnyvale, California-based Synopsys, Inc. (SNPS) provides electronic design automation software products used to design and test integrated circuits. With a market cap of $71.2 billion, the company provides design technologies to creators of advanced integrated circuits, electronic systems, and systems on a chip.
Companies worth $10 billion or more are generally described as “large-cap stocks.” SNPS effortlessly fits that bill, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the software infrastructure industry.
Synopsys is a leader in the electronic design automation (EDA) software market, driven by its commitment to research and development. This focus on continuous innovation strengthens its market position and fosters a loyal customer base that depends on its advanced design automation tools.
Despite its notable strengths, SNPS slipped 26.3% from its 52-week high of $629.38, achieved on Feb. 22. Over the past three months, SNPS stock declined 18.8%, underperforming the Technology Select Sector SPDR Fund’s (XLK) 3.9% dip during the same time frame.
In the longer term, shares of SNPS dipped 9.9% on a YTD basis but climbed 1.1% over the past 52 weeks. In comparison, XLK is up 7.7% ona YTD basis and has returned 20% over the last year.
To confirm the bearish trend, Synopsys has traded below its 50-day and 200-day moving averages since early August and has experienced few fluctuations since then.
On Aug. 21, SNPS reported its Q3 earnings results, and its shares rose more than 1% in the following trading session. Its revenue stood at $1.5 billion, up 12.7% year over year. The company’s adjusted EPS of $3.43 was stronger than the consensus of $3.28. SNPS raised its full-year adjusted EPS forecast to $13.07 to $13.12 from a previous forecast of $12.90 to $12.98, above the consensus of $12.95.
In the competitive arena of software infrastructure stocks, Palantir Technologies Inc. (PLTR) has taken the lead over SNPS, showing resilience with a 101.5% uptick on a YTD basis and solid 128.7% gains over the past 52 weeks.
Wall Street analysts are bullish on SNPS’ prospects. The stock has a consensus “Strong Buy” rating from the 14 analysts covering it, and the mean price target of $648.50 suggests a potential upside of 39.7% from current price levels.
On the date of publication, Neha Panjwani 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.
