Synopsys ( SNPS ) is preparing to release its quarterly earnings on Wednesday, 2025-05-28. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect Synopsys ( SNPS ) to report an earnings per share (EPS) of $3.52.

Anticipation surrounds Synopsys's ( SNPS ) announcement, with investors hoping to hear about both surpassing estimates and receiving positive guidance for the next quarter.

New investors should understand that while earnings performance is important, market reactions are often driven by guidance.

Earnings Track Record

In the previous earnings release, the company beat EPS by $0.19, leading to a 3.35% drop in the share price the following trading session.

Here's a look at Synopsys's ( SNPS ) past performance and the resulting price change:

Tracking Synopsys's Stock Performance

Shares of Synopsys ( SNPS ) were trading at $498.85 as of May 26. Over the last 52-week period, shares are down 12.77%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Insights Shared by Analysts on Synopsys

For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Synopsys ( SNPS ).

The consensus rating for Synopsys ( SNPS ) is Outperform, based on 7 analyst ratings. With an average one-year price target of $587.57, there's a potential 17.78% upside.

Understanding Analyst Ratings Among Peers

The analysis below examines the analyst ratings and average 1-year price targets of Cadence Design Systems, Workday and Autodesk, three significant industry players, providing valuable insights into their relative performance expectations and market positioning.

Analysts currently favor an Outperform trajectory for Cadence Design Systems, with an average 1-year price target of $320.38, suggesting a potential 35.78% downside.

Analysts currently favor an Outperform trajectory for Workday, with an average 1-year price target of $301.0, suggesting a potential 39.66% downside.

Analysts currently favor an Outperform trajectory for Autodesk, with an average 1-year price target of $335.71, suggesting a potential 32.7% downside.

Key Findings: Peer Analysis Summary

In the peer analysis summary, key metrics for Cadence Design Systems, Workday and Autodesk are highlighted, providing an understanding of their respective standings within the industry and offering insights into their market positions and comparative performance.

Key Takeaway:

Synopsys ( SNPS ) ranks at the bottom for Revenue Growth with a negative rate, while its peers show positive growth rates. In terms of Gross Profit, Synopsys ( SNPS ) is at the top with the highest value. However, for Return on Equity, Synopsys ( SNPS ) is at the bottom compared to its peers. Overall, Synopsys ( SNPS ) performs well in terms of Gross Profit but lags behind in Revenue Growth and Return on Equity.

About Synopsys

Synopsys ( SNPS ) is a provider of electronic design automation software and intellectual property products. EDA software automates and aids in the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. Synopsys' ( SNPS ) comprehensive portfolio is benefiting from a convergence of semiconductor companies moving up the stack of technologies toward systems-like companies, and systems companies moving down-stack toward in-house chip design. The resulting expansion in EDA customers alongside secular digitalization of various end markets benefits EDA vendors like Synopsys ( SNPS ).

Synopsys's Financial Performance

Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

Revenue Challenges: Synopsys's ( SNPS ) revenue growth over 3 months faced difficulties. As of 31 January, 2025, the company experienced a decline of approximately -3.68%. This indicates a decrease in top-line earnings. When compared to others in the Information Technology sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Net Margin: Synopsys's ( SNPS ) net margin is impressive, surpassing industry averages. With a net margin of 20.32%, the company demonstrates strong profitability and effective cost management.

Return on Equity (ROE): Synopsys's ( SNPS ) ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of 3.23%, the company may face hurdles in achieving optimal financial returns.

Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of 2.26%, the company showcases effective utilization of assets.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.07.

To track all earnings releases for Synopsys ( SNPS ) visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.