Why Synopsys Stock Is Up After Earnings

Synopsys, Inc SNPS shares are trading higher Thursday after the company posted better-than-expected first-quarter financial results after the bell Wednesday.

The Details:

Synopsys reported quarterly earnings of $3.56 per share, which beat the analyst consensus estimate of $3.43 by 3.79%.

The company reported quarterly sales of $1.65 billion, in line with the analyst consensus, and a 21.16% increase over sales of $1.36 billion from the same period last year.

Synopsys also issued strong guidance and said it sees second-quarter adjusted earnings of between $3.09 and $3.14 per share, versus the $3.01 estimate, and second-quarter revenue between $1.56 billion and $1.59 billion, versus the $1.55 billion estimate.

Synopsys shares may also be moving higher as AI-related companies move in sympathy with Nvidia Corporation after the company posted blockbuster fourth-quarter results. 

Needham analyst Charles Shi reiterated Synopsys with a Buy rating and maintained a $660 price target on Thursday. 

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SNPS Stock Prediction 2024:

Synopsys’s revenue growth in FY23 was 15.0%, reflecting the influence of various factors including the macroeconomic environment, demand for its products and services, and its position relative to competitors. This growth is a critical indicator for investors assessing the company’s future prospects.

Some macro factors that could impact the company's performance in the next year include higher interest rates, progress on reeling in inflation and labor market strength. The Fed's benchmark rate is currently at 5.33%, while PPI recently came in at 0.3%, growing 0.9% from last year. The unemployment rate was most recently reported as 3.7%.

An investor should pay attention to economic conditions to decide whether they think the macro environment is positive or negative for Synopsys stock. For real time economic data and breaking market updates, check out Benzinga Pro. Try it for free.

How does this stack up against Synopsys's peers?

Investors may also want to analyze a stock in comparison to companies with similar products or in similar industries. Synopsys operates in the Information Technology sector. The stock has experienced average annual growth of 33.16% compared to the 5.68% average of its peer companies. This is above the broader sector movement of Synopsys.

SNPS Price Action: According to Benzinga Pro, Synopsys shares are up 10.38% at $600.00 at the time of publication.

Image: Reto Scheiwiller from Pixabay