Synopsys (NASDAQ:SNPS) to Buyback $1.00 billion in Outstanding Shares

Key Points

• Synopsys authorized a $1 billion share repurchase program, allowing the company to buy back up to 1.1% of its outstanding shares through open-market purchases.
• The company reported stronger-than-expected quarterly results, with EPS of $3.91 versus the $3.67 consensus estimate and revenue of $2.48 billion, up 42.4% year over year.
• Wall Street sentiment remains favorable: 17 analysts rate the stock a Buy, with a consensus price target of $584.11, though insiders have sold about $38 million of shares over the past three months.

Synopsys (NASDAQ:SNPS - Get Free Report) announced that its board has authorized a share buyback program on Monday, October 5th, RTT News reports. The company plans to repurchase $1.00 billion in shares. This repurchase authorization permits the semiconductor company to buy up to 1.1% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company's board of directors believes its stock is undervalued.

Synopsys Trading Down 0.3%

SNPS stock traded down $1.43 during midday trading on Monday, hitting $488.47. The company had a trading volume of 2,818,480 shares, compared to its average volume of 2,223,150. The company has a current ratio of 1.34, a quick ratio of 1.24 and a debt-to-equity ratio of 0.29. Synopsys has a 52 week low of $362.55 and a 52 week high of $539.48. The stock's 50 day moving average price is $410.00 and its 200 day moving average price is $436.90. The stock has a market cap of $93.61 billion, a price-to-earnings ratio of 86.30, a PEG ratio of 2.00 and a beta of 1.21.

Synopsys (NASDAQ:SNPS - Get Free Report) last released its quarterly earnings data on Wednesday, August 26th. The semiconductor company reported $3.91 earnings per share for the quarter, beating analysts' consensus estimates of $3.67 by $0.24. Synopsys had a return on equity of 6.24% and a net margin of 11.43%.The firm had revenue of $2.48 billion during the quarter, compared to analyst estimates of $2.44 billion. During the same quarter in the prior year, the firm posted $3.39 earnings per share. The business's quarterly revenue was up 42.4% compared to the same quarter last year. Synopsys has set its Q4 2026 guidance at 4.100-4.160 EPS and its FY 2026 guidance at 15.040-15.100 EPS. As a group, equities research analysts expect that Synopsys will post 10.97 earnings per share for the current fiscal year.

Wall Street Analyst Weigh In

SNPS has been the topic of several research reports. Needham & Company LLC reissued a "buy" rating and set a $580.00 price target on shares of Synopsys in a research note on Thursday, August 27th. UBS Group set a $570.00 price objective on shares of Synopsys in a research note on Thursday, August 27th. BNP Paribas Exane raised shares of Synopsys from an "underperform" rating to a "neutral" rating and set a $420.00 target price on the stock in a report on Thursday, September 24th. Robert W. Baird upgraded shares of Synopsys from a "neutral" rating to an "outperform" rating and lifted their target price for the stock from $558.00 to $560.00 in a research report on Thursday, August 27th. Finally, Wells Fargo & Company boosted their price target on shares of Synopsys from $475.00 to $540.00 and gave the stock an "overweight" rating in a research note on Thursday. Seventeen equities research analysts have rated the stock with a Buy rating, four have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and a consensus target price of $584.11.

Insiders Place Their Bets

In other Synopsys news, CEO Sassine Ghazi sold 14,604 shares of the business's stock in a transaction dated Tuesday, September 15th. The shares were sold at an average price of $374.88, for a total value of $5,474,747.52. Following the transaction, the chief executive officer owned 76,865 shares in the company, valued at approximately $28,815,151.20. The trade was a 15.97% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Aart de Geus sold 24,641 shares of the company's stock in a transaction dated Tuesday, September 1st. The shares were sold at an average price of $419.44, for a total transaction of $10,335,421.04. Following the transaction, the insider directly owned 120,443 shares of the company's stock, valued at approximately $50,518,611.92. This trade represents a 16.98% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 89,245 shares of company stock worth $37,992,919. Insiders own 0.56% of the company's stock.

About Synopsys

Synopsys, Inc is a technology company that develops electronic design automation (EDA) software, semiconductor intellectual property (IP), and software tools used to design, verify, and manufacture advanced electronic systems. Its solutions support the development of semiconductors, systems-on-chip, and electronic products across the design cycle, from initial specification and architecture through testing and production.

The company's offerings include digital and custom integrated-circuit design tools, simulation and verification software, physical design and signoff products, and semiconductor IP such as processor cores, interface technologies, and foundational components.

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