Synopsys shares rose Thursday after the chip design software maker beat analyst estimates for its fiscal second quarter and raised its outlook for the rest of the year. SNPS stock jumped more than 8% on the news.
The Mountain View, Calif.-based company late Wednesday said it earned an adjusted $2.54 a share on sales of $1.39 billion during the quarter ended April 30. Analysts polled by FactSet had expected Synopsys earnings of $2.48 a share on sales of $1.38 billion. On a year-over-year basis, Synopsys earnings increased 2% while sales advanced 9%.
For the current quarter ending July 31, Synopsys predicted adjusted earnings of $2.73 a share on sales of $1.48 billion. That's based on the midpoint of its outlook. Wall Street had called for earnings of $2.70 a share on sales of $1.48 billion in the fiscal third quarter.
For the full year ending Oct. 31, Synopsys predicted adjusted earnings of $10.81 a share on sales of $5.81 billion, based on the midpoint of its outlook. Analysts were looking for earnings of $10.58 a share on sales of $5.79 billion in fiscal 2023.
SNPS Stock Breaks Out
On the stock market today, SNPS stock rose 8.7% to close at 409.71. With the move, SNPS stock broke out of a flat base at a buy point of 392.89, according to IBD MarketSmith charts.
"We have a really resilient business model that is tied to our customers' R&D programs and long-term plans," Chief Financial Officer Shelagh Glaser told Investor's Business Daily. The company also boasts improving profit margins, she said.
Synopsys raised its full-year guidance to revenue growth of 14-15% and adjusted earnings-per-share growth of 21-22%.
SNPS stock ranks fourth out of 12 stocks in IBD's Computer Software-Design industry group, according to IBD Stock Checkup. Synopsys has an IBD Composite Rating of 96 out of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Also, SNPS stock is in the IBD Long-Term Leaders Portfolio. Further, Synopsys is in the IBD Tech Leaders stock list.
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