The stock of Synopsys (SNPS) is down 7% after the electronic design automation company’s forward guidance underwhelmed analysts and investors.
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The company reported Fiscal fourth quarter earnings per share (EPS) of $3.40, which topped the consensus forecast among analysts of $3.30. Revenue for the quarter came in at $1.64 billion, which was slightly ahead of the $1.63 billion expected on Wall Street. Sales were up 11% from a year earlier.
However, SNPS stock is down in after hours trading as the company’s Fiscal first-quarter guidance came in lower than analysts had anticipated. The company said that it expects earnings to come in at $2.77 to $2.82 per share, which is well below the $3.53 that analysts had penciled in for Synopsys.
Revenue Guidance Falls Short
The company’s revenue guidance also came up short of expectations. Synopsys said it anticipates Fiscal first-quarter revenues of $1.435 billion to $1.465 billion. That was less than the $1.631 billion that analysts were looking for from the company.
Synopsys, whose equipment is used in the global microchip industry, offered an annual outlook for 2025 that wasn’t as bad as the near-term outlook for the current quarter. The company sees revenue growing 11% over 2024 levels in the year ahead. Management said 2025 is likely to be a backloaded year.
SNPS stock has risen 14% this year.
Is SNPS Stock a Buy?
The stock of Synopsys has a consensus Strong Buy rating among eight Wall Street analysts. That rating is based on seven Buy and one Hold recommendations issued in the last three months. The average SNPS price target of $641.25 implies 9.06% upside from current levels.
