Anticipated Results in Synopsys' Upcoming Quarterly Financial Statement
Synopsys, Inc., a tech titan hailing from Sunnyvale, California, boasts a hefty market cap of over $60 billion. This heavyweight player in the silicon-to-systems design industry offers reliable solutions from electronic design automation to silicon IP, system verification, and validation.
Next week, on May 28, Synopsys is set to reveal its second-quarter results. Analysts have their eyes on an adjusted EPS of $2.40, representing a 12.2% growth from the $2.14 reported in the previous year's quarter. Remarkably, the company has outperformed the Street's bottom-line estimates in each of the last four quarters.
The fiscal 2025 is anticipated to bring an adjusted EPS of $10.70, up 4.4% from the $10.25 reported in fiscal 2024. For fiscal 2026, Synopsys' earnings are expected to surge 19.8% year-over-year to $12.82 per share.
Over the past 52 weeks, Synopsys' stock has taken a tumble, registering a 18.3% drop. In contrast, the S&P 500 Index and the Technology Select Sector SPDR Fund have experienced growth of 8.4% and 4.2%, respectively, during the same period.
Despite posting better-than-expected financials, Synopsys' stock saw a 3.4% decline in the trading session following the release of its Q1 results on Feb. 26. Despite total revenues surpassing expectations, they recorded a 3.7% decline compared to the year-ago quarter. The Design IP segment's revenues plummeted by 17.2% to $435.1 million, primarily due to the softness in the macro environment.
The company also experienced a substantial increase in general & admin and other expenses, leading to a significant decline in earnings. Net income for the quarter dropped by 34.2% year-over-year to $295.7 million. Additionally, the company reported a negative $67.5 million cash flow from operations and reduced its full-year GAAP-based earnings guidance, which rattled investor confidence.
Despite these hurdles, the overall view on Synopsys remains optimistic, with a consensus rating of "Strong Buy." Of the 18 analysts covering the stock, opinions include 15 "Strong Buys," one "Moderate Buy," and two "Holds." The mean price target of $601.44 suggests a potential upside of 35.5% from current price levels.
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- In the upcoming article about Synopsys' second-quarter earnings on May 28, analysts will be looking for an adjusted EPS of $2.40, predicting a 12.2% growth compared to the previous year.
- For the upcoming fiscal year 2025, Synopsys is expected to post an adjusted EPS of $10.70, representing a 4.4% increase from the fiscal 2024 earnings.
- The synopsis of Synopsys' Q1 results on Feb. 26 showed better-than-expected financials, but the stock saw a 3.4% decline in the trading session.
- Despite Synopsys' Design IP segment revenues dropping by 17.2% in the last quarter, the optimistic view on the company remains, with a consensus rating of "Strong Buy" among 18 analysts covering the stock.
