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With a market cap of $82.64 billion, Synopsys, Inc. (SNPS) provides electronic design automation (EDA) software. Headquartered in Sunnyvale, California, the company is known for its innovative solutions in the semiconductor industry. Synopsys plays a crucial role in enabling companies to design and verify advanced chips and systems.
SNPS has underperformed the broader market over the last year. The stock has gained 18.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.5%. In 2024, the stock has gained 2.1%, compared to SPX's 17.8% gains on a YTD basis.
Narrowing the focus, SNPS also underperformed the iShares Expanded Tech-Software Sector ETF (IGV). The exchange-traded fund has gained 6.1% on a YTD basis.
Synopsys is up over 1% after reporting Q3 adjusted EPS of $3.43, surpassing the consensus estimate of $3.28. The company also raised its full-year adjusted EPS forecast to $13.07 to $13.12, up from the previous forecast of $12.90 to $12.98 and higher than the consensus estimates of $12.95.
For the current fiscal year, ending in October, analysts expect SNPS’ EPS to grow 19.7% to $9.48 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in all four quarters.
Among the 14 analysts covering SNPS stock, the consensus rating is a “Strong Buy.” That’s based on 12 “Strong Buy” ratings, one “Moderate Buy,” and one “Hold.”
On Aug. 22, Ruben Roy from Stifel Nicolaus maintained a “Buy” rating on Synopsys, with a price target of $620, which indicates a 17.9% upside from the current levels.
The mean price target of $638.28 represents a 21.4% premium to SNPS’ current price levels. The Street-high price target of $690 suggests an upside potential of 31.2%.
On the date of publication, Rashmi Kumari 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.
