SNPS

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Synopsys stock sits at an interesting valuation crossroads, with the Discounted Cash Flow (DCF) intrinsic value estimate pointing to roughly 10.4% upside while traditional market multiples suggest the shares are priced on the rich side. That split comes after the stock has delivered a 59.7% gain over five years, even though the shorter term picture has been weaker. Over the past five years Synopsys has returned 59.7%, which means long term holders have still come out ahead despite the more recent pullback. The pivot toward AI enabled chip design tools, including new multiphysics fusion solutions, can support expectations for future cash flows, while the decision to phase out certain semiconductor manufacturing software introduces execution risk around this product transition. On Simply Wall St's broader valuation checks, Synopsys scores just 2 out of 6, which leans expensive overall even though the DCF suggests some undervaluation. The issue now is whether Synopsys' current share price offers enough margin of safety when the DCF upside and richer earnings multiples are pulling in different directions. Synopsys delivered -21.7% returns over the last year. See how this stacks up to the rest of the Software industry. The Discounted Cash Flow (DCF) method estimates what Synopsys is worth based on the cash it can generate for shareholders. Synopsys produced about $2.6b in free cash flow over the last twelve months, and the model assumes those cash flows continue growing rather than shrinking. On that basis, the 2 Stage Free Cash Flow to Equity model arrives at an estimated intrinsic value of around $495 per share. Compared with the current share price, this implies the stock screens about 10.4% undervalued. Because Synopsys is phasing out certain semiconductor manufacturing software to prioritize higher margin, AI focused design tools, the market may be applying a caution discount while this transition plays out. The DCF suggests Synopsys appears undervalued relative to the cash flows analysts currently include in their projections. Our Discounted Cash Flow (DCF) analysis suggests Synopsys is undervalued by 10.4%. Track this in your watchlist or portfolio, or discover 44 more high quality undervalued stocks. Head to the Val...

It has been about a month since the last earnings report for Synopsys (SNPS). Shares have lost about 5.3% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Synopsys due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts. Synopsys reported non-GAAP earnings of $3.35 per share for the second quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 5.7%. The bottom line decreased 8.7% on a year-over-year basis. Synopsys’ fiscal second-quarter revenues jumped 41.9% year over year to $2.28 billion, beating the Zacks Consensus Estimate by 1.1%. The top line was primarily driven by an increase in revenues of Time-Based Product, Upfront Product and Maintenance and Service businesses. In the license-type revenue group, Time-Based Product revenues of $945.6 million (representing 41.5% of total revenues) increased 14.2% year over year. Upfront Product revenues (24% of total) rose 7% to $546.3 million. Maintenance and Service revenues (34.5% of total) surged to $784.1 million, up sharply from the year-ago quarter’s $265.3 million. Segment-wise, Design Automation revenues, which include EDA, Ansys and Other, were $1.82 billion, representing 80% of total revenues and up 62.3% from the prior-year quarter. Design IP revenues were $454.2 million, representing 20% of total revenues and down from $482 million a year ago. With the addition of Ansys, the Simulation & Analysis group is now incorporated into the EDA segment, beginning the third quarter of fiscal 2025. Other revenues were $7 million, representing 0.3% of total revenues. Ansys contributed 28.7% of the total revenues. Geographically, Synopsys generated $998.5 million from North America (44% of total) and $378.1 million from Europe (17%). Revenues from Korea (12%), China (10%) and Other regions (17%) were $265.4 million, $240.4 million and $393.6 million, respectively. The non-GAAP operating margin for the quarter was 39.5%, which expanded 150 basis points from the year-ago period. Within segments, Design Automation’s adjusted operating margin improved to 43.3%, up from 40.9% a year earlier, while the Design IP segment’s adjusted margin contracted to 24.4%, down from 31.2% las...

Synopsys’ SNPS Design IP segment faced pressure in the second quarter of fiscal 2026. Revenues declined to $454.2 million from $482 million in the year-ago quarter, while adjusted operating margin fell to 24% from 31%. The weakness was not limited to a single quarter, as the segment’s adjusted operating margin for the first six months of fiscal 2026 was 21%, down from 30% in the same period last year. Furthermore, Synopsys continues to carry a sizable debt load following its recent acquisitions and strategic investments. As of April 30, 2026, the company had $10.014 billion in long-term debt compared with $2.484 billion in cash, cash equivalents and short-term investments. The debt burden is contributing to higher financing costs, affecting the bottom line. The Design IP segment experienced margin pressure in the second quarter of fiscal 2026 as Synopsys continued to reposition the business toward higher-growth artificial intelligence opportunities. Management attributed the decline primarily to reduced revenues as resources are being reallocated toward the most attractive AI-driven markets, including custom silicon and hyperscaler demand. Despite the near-term weakness, Synopsys expects the IP business to recover sequentially through the second half of fiscal 2026, supported by its expanding pipeline in high-speed connectivity, UCIe, HBM4 memory interfaces and customized AI silicon solutions. As these premium offerings gain traction, the company believes the Design IP business will generate higher-value engagements and stronger long-term profitability, making the current margin pressure largely an investment in future growth. Synopsys faces tough competition from EDA vendors, such as Cadence Design Systems Inc. CDNS and Keysight Technologies KEYS. These companies offer products focused more on distinct phases of the IC design process and provide a range of services to companies throughout the world to help optimize their product development process, among other things. Keysight Technologies competes in the electronic design and testing space, particularly providing software solutions for electromagnetic analysis, circuit simulation and hardware verification. Cadence benefits from higher design complexity and rising customer spend on AI-driven automation. Amid rapid AI proliferation, the Cadence.ai portfolio has been gaining strength, and the new product lau...

This article first appeared on GuruFocus. Palantir Technologies Inc. (PLTR, Financials) led a group of highly rated software stocks as the sector gained momentum from stronger earnings growth, improved analyst sentiment and rising artificial intelligence adoption. Warning! GuruFocus has detected 4 Warning Signs with PLTR. Is PLTR fairly valued? Test your thesis with our free DCF calculator. Software stocks had a volatile start to the year, but investor interest has improved as earnings expectations move higher. According to Societe Generale strategist Manish Kabra, earnings-per-share revisions for the software sector have reached an eight-year high. The shift suggests analysts are becoming more confident in the sector's growth outlook. AI adoption is also helping software companies show new demand from enterprise customers looking to automate workflows, analyze data and improve productivity. Palantir remains one of the most closely watched names because of its position in government and commercial data software. Other bullish Quant-rated names include AppLovin, Synopsys, Rubrik, SentinelOne, LiveRamp and Agilysys. For investors, the key question is whether stronger earnings revisions can turn into lasting revenue growth. Upcoming quarterly results and guidance updates will show whether the software rebound has more room to run.

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Synopsys SNPS reported non-GAAP earnings of $3.35 per share for the second quarter of fiscal 2026, which beat the Zacks Consensus Estimate by 5.7%. The bottom line decreased 8.7% on a year-over-year basis. Synopsys’ earnings beat the Zacks Consensus Estimate thrice and missed once in the trailing four quarters, with the average surprise being 0.9%. Synopsys’ fiscal second-quarter revenues jumped 41.9% year over year to $2.28 billion, beating the Zacks Consensus Estimate by 1.1%. The top line was primarily driven by an increase in revenues of Time-Based Product, Upfront Product and Maintenance and Service businesses. Synopsys, Inc. price-consensus-eps-surprise-chart | Synopsys, Inc. Quote In the license-type revenue group, Time-Based Product revenues of $945.6 million (representing 41.5% of total revenues) increased 14.2% year over year. Upfront Product revenues (24% of total) rose 7% to $546.3 million. Maintenance and Service revenues (34.5% of total) surged to $784.1 million, up sharply from the year-ago quarter’s $265.3 million. Segment-wise, Design Automation revenues, which include EDA, Ansys and Other, were $1.82 billion, representing 80% of total revenues and up 62.3% from the prior-year quarter. Design IP revenues were $454.2 million, representing 20% of total revenues and down from $482 million a year ago. With the addition of Ansys, the Simulation & Analysis group is now incorporated into the EDA segment, beginning the third quarter of fiscal 2025. Other revenues were $7 million, representing 0.3% of total revenues. Ansys contributed 28.7% of the total revenues. Geographically, Synopsys generated $998.5 million from North America (44% of total) and $378.1 million from Europe (17%). Revenues from Korea (12%), China (10%) and Other regions (17%) were $265.4 million, $240.4 million and $393.6 million, respectively. The non-GAAP operating margin for the quarter was 39.5%, which expanded 150 basis points from the year-ago period. Within segments, Design Automation’s adjusted operating margin improved to 43.3%, up from 40.9% a year earlier, while the Design IP segment’s adjusted margin contracted to 24.4%, down from 31.2% last year. Synopsys ended the second quarter of fiscal 2026 with $2.48 billion in cash, cash equivalents and short-term investments, up from $2.20 billion in the prior quarter. Total long-term debt was $10.01 billion. During the second q...

The chip-design software and hardware firm beat analyst expectations for both earnings and revenue. It also raised its full-year guidance.

Synopsys (SNPS) came out with quarterly earnings of $3.35 per share, beating the Zacks Consensus Estimate of $3.17 per share. This compares to earnings of $3.67 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.76%. A quarter ago, it was expected that this maker of software used to test and develop chips would post earnings of $3.57 per share when it actually produced earnings of $3.77, delivering a surprise of +5.6%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Synopsys, which belongs to the Zacks Computer - Software industry, posted revenues of $2.28 billion for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 1.13%. This compares to year-ago revenues of $1.6 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Synopsys shares have added about 13.8% since the beginning of the year versus the S&P 500's gain of 9.8%. While Synopsys has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Synopsys was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1...

For the quarter ended April 2026, Synopsys (SNPS) reported revenue of $2.28 billion, up 41.9% over the same period last year. EPS came in at $3.35, compared to $3.67 in the year-ago quarter. The reported revenue represents a surprise of +1.13% over the Zacks Consensus Estimate of $2.25 billion. With the consensus EPS estimate being $3.17, the EPS surprise was +5.76%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Synopsys performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue- Maintenance and service: $784.11 million compared to the $708.37 million average estimate based on five analysts. The reported number represents a change of +195.6% year over year. Revenue- Total products revenue: $1.49 billion versus the five-analyst average estimate of $1.54 billion. The reported number represents a year-over-year change of +11.4%. Revenue by segment- Design IP: $454.2 million versus the four-analyst average estimate of $439.18 million. The reported number represents a year-over-year change of -5.8%. Revenue by segment- Design Automation: $1.82 billion versus $1.67 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +62.3% change. Revenue- Upfront products: $546.25 million compared to the $455.68 million average estimate based on four analysts. The reported number represents a change of +7% year over year. Revenue- Time-based products: $945.62 million versus $1.08 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +14.2% change. View all Key Company Metrics for Synopsys here>>> Shares of Synopsys have returned +10.5% over the past month versus the Zacks S&P 500 composite's +5.1% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. Want the latest recommendations from Zacks Investment Res...

Image source: The Motley Fool. Wednesday, May 27, 2026 at 5 p.m. ET President and CEO — Sassine Ghazi Chief Financial Officer — Shelagh Glaser Need a quote from a Motley Fool analyst? Email [email protected] Sassine Ghazi, President and CEO of Synopsys and Shelagh Glaser, CFO. Before we begin, I would like to remind everyone that during the course of this conference call, Synopsys will discuss forecasts, targets and other forward looking statements regarding the company and its financial results. While these statements represent our best current judgment about future results, and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. In addition to any risks that we highlight during this call, important factors that may affect our future results are described in our most recent SEC reports, and today's earnings press release. In addition, we will refer to certain non GAAP financial measures during the discussion. Reconciliations to their most directly comparable GAAP financial measures and supplemental financial information can be found in the earnings press release financial supplement and 8-Ks that we released earlier today. In addition, as mentioned, in our earnings press release today, we plan to host an Investor Day on September 30, 2026. All of these items, plus the most recent investor presentation, and the Investor Day information can be found on our website at www.synopsys.com. In addition, the prepared remarks will be posted on our website at the conclusion of the call. With that, I will turn the call over to Sassine Ghazi. Sassine Ghazi: Good afternoon. Synopsys delivered a strong second quarter. Exceeding guidance on revenue, non GAAP operating margin and non GAAP EPS driven by solid execution and continued AI driven demand strength. This is an exceptional moment to be the leading engineering solutions provider. EDA IP and multiphysics simulation have emerged as essential capabilities in the AI supply chain. AI scaling semiconductor demand architectural diversity, and complexity of both chips and the systems they power, driving increased demand across our portfolio. Our opportunities expanding as customers design increasingly complex systems. From silicon to full scale AI and physical AI. Requiring more integrated engineering solutions across desi...

(Bloomberg) -- While software stocks rebound from the artificial intelligence-driven wipeout earlier this year, Salesforce Inc. hasn’t really benefited. But its earnings after the close Wednesday could pull the company’s shares out of their malaise. Most Read from Bloomberg Singapore Hands Byju's Founder His First Ever Jail Term Iran’s Khamenei Says No Going Back for Middle East Rocked by War Ex-President Biden Sues to Stop DOJ Sharing Interview Tapes Two More Oil Supertankers Exit Hormuz to Help Push Up Flows ‘KPop Demon Hunters’ Studio Draws Tencent Music Investment Salesforce is up 8% since hitting a three-year low on April 10, but the stock still has lost 32% this year. It’s badly underperforming the iShares Expanded Tech-Software Sector exchange-traded fund, which has jumped 25% since hitting its own recent low on April 10 and is down 12% this year. And both are being trounced by the technology-heavy Nasdaq 100 Index’s 19% rise in 2026, largely powered by high-flying chipmakers. Salesforce shares dipped 0.1% on Wednesday afternoon. “It has gone through a very painful period, but there’s a stickiness and staple-like nature to the business that people have underestimated, even though revenue is still growing at a decent pace,” said Brian Kersmanc, portfolio manager at GQG Partners, which owns Salesforce shares. “Now that we’ve had this big washout, I think we’re going to start seeing the merits shine through.” Software stocks are getting some life as encouraging corporate earnings reports indicate that AI may not end up devastating growth like investors had assumed, and in some cases it could be a potential tailwind. That, coupled with valuations that fell to rock-bottom levels, has Wall Street thinking that the industrywide weakness from earlier this year may have gone too far. Salesforce, however, has missed much of the bounce back as it continues to face questions about its prospects. Wall Street’s primary concern is competition from Anthropic and OpenAI weakening demand and pricing power for its customer relationship management software, which for years drove robust growth at high margins. For example, Bank of America last week reinstated coverage of the company with an underperform rating due to “structurally lower growth” and greater competitive risks from AI. “Salesforce remains a deeply entrenched platform, yet we expect a structural reset driven...

Synopsys (SNPS) reported fiscal Q2 non-GAAP earnings late Wednesday of $3.35 per diluted share, down