Synopsys (NASDAQ:SNPS) Shares Up 8.7% Following Earnings Beat

Key Points

• Synopsys shares jumped 8.7% after fiscal third-quarter results beat expectations, with EPS of $3.91 versus $3.67 expected and revenue of $2.48 billion versus $2.44 billion. Revenue increased 42.4% year over year.
• Management raised its fiscal 2026 outlook to approximately $9.715 billion in revenue and $15.07 in non-GAAP EPS, citing strong demand for electronic-design-automation tools driven by AI infrastructure and rising chip complexity.
• Analyst sentiment remains favorable, with the stock holding a “Moderate Buy” consensus rating and an average price target of $560.76, though its elevated valuation and trading below its 200-day moving average remain potential concerns.

Shares of Synopsys, Inc. (NASDAQ:SNPS - Get Free Report) rose 8.7% on Thursday after the company announced better than expected quarterly earnings. The company traded as high as $442.55 and last traded at $445.7070. Approximately 679,983 shares traded hands during mid-day trading, a decline of 66% from the average session volume of 1,976,175 shares. The stock had previously closed at $410.00.

The semiconductor company reported $3.91 earnings per share for the quarter, beating the consensus estimate of $3.67 by $0.24. The firm had revenue of $2.48 billion during the quarter, compared to the consensus estimate of $2.44 billion. Synopsys had a net margin of 8.91% and a return on equity of 5.83%. The firm's revenue for the quarter was up 42.4% on a year-over-year basis. During the same quarter in the previous year, the company posted $3.39 EPS. Synopsys has set its Q4 2026 guidance at 4.100-4.160 EPS and its FY 2026 guidance at 15.040-15.100 EPS.

Key Synopsys News

Here are the key news stories impacting Synopsys this week:

• Positive Sentiment: Quarterly results exceeded expectations. Synopsys reported fiscal Q3 revenue of $2.477 billion, up 42.4% year over year and ahead of the $2.44 billion consensus estimate. Non-GAAP EPS was $3.91 versus expectations of $3.67 and $3.39 a year earlier. Synopsys Posts Financial Results for Third Quarter Fiscal Year 2026
• Positive Sentiment: Management raised its fiscal 2026 outlook. Full-year revenue guidance was lifted to a midpoint of approximately $9.715 billion, while non-GAAP EPS guidance rose to $15.07, well above the roughly $13.96 analyst consensus cited in the reports. Fourth-quarter EPS guidance of $4.10–$4.16 also exceeds the $3.78 consensus. Synopsys raises annual forecasts on AI-driven chip design software demand
• Positive Sentiment: AI-related demand remains the primary growth catalyst. Synopsys said rising chip complexity and investments in AI infrastructure are accelerating demand for its electronic-design-automation tools. Design Automation revenue reached $2.003 billion, supported by broad-based strength. Synopsys Boosts Annual Outlook as AI Complexity Drives Demand
• Positive Sentiment: Analyst sentiment remains favorable. Needham reaffirmed its “Buy” rating and set a $580 price target, while Rosenblatt also assigned a “Buy” rating. These targets imply substantial upside from recent trading levels.
• Neutral Sentiment: The company’s Nvidia relationship and vision for autonomous, AI-powered engineering workflows reinforce the long-term growth narrative, although these developments do not immediately change reported results. Nvidia's $2 Billion Synopsys Bet Signals AI's Next Frontier
• Negative Sentiment: Despite the earnings beat and raised outlook, shares slipped initially after the report. With a price-to-earnings ratio near 95 and the stock below its 50- and 200-day moving averages, investors may be demanding even stronger results or using the announcement to lock in gains.

Analyst Upgrades and Downgrades

Several brokerages recently weighed in on SNPS. Benchmark reaffirmed a "buy" rating and issued a $570.00 target price on shares of Synopsys in a research report on Thursday. Stifel Nicolaus raised their price target on shares of Synopsys from $550.00 to $600.00 and gave the company a "buy" rating in a report on Thursday, May 28th. KeyCorp restated an "overweight" rating on shares of Synopsys in a report on Wednesday, August 19th. Wells Fargo & Company cut their target price on shares of Synopsys from $535.00 to $450.00 and set an "equal weight" rating on the stock in a research note on Tuesday, August 11th. Finally, Weiss Ratings restated a "hold (c-)" rating on shares of Synopsys in a research note on Monday, June 8th. Twelve research analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $560.76.

Insider Buying and Selling

In other news, CFO Shelagh Glaser sold 3,394 shares of the business's stock in a transaction that occurred on Friday, June 12th. The stock was sold at an average price of $450.02, for a total transaction of $1,527,367.88. Following the completion of the transaction, the chief financial officer directly owned 14,358 shares in the company, valued at approximately $6,461,387.16. The trade was a 19.12% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sassine Ghazi sold 14,603 shares of the stock in a transaction that occurred on Monday, June 15th. The stock was sold at an average price of $458.96, for a total value of $6,702,192.88. Following the completion of the transaction, the chief executive officer directly owned 75,020 shares of the company's stock, valued at $34,431,179.20. This trade represents a 16.29% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders own 0.56% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of SNPS. Foronjy Financial LLC increased its position in shares of Synopsys by 5.2% during the fourth quarter. Foronjy Financial LLC now owns 446 shares of the semiconductor company's stock worth $210,000 after acquiring an additional 22 shares in the last quarter. AGH Wealth Advisors LLC lifted its position in Synopsys by 4.4% in the 1st quarter. AGH Wealth Advisors LLC now owns 569 shares of the semiconductor company's stock valued at $226,000 after acquiring an additional 24 shares in the last quarter. Hardy Reed LLC boosted its stake in Synopsys by 0.8% during the 4th quarter. Hardy Reed LLC now owns 3,309 shares of the semiconductor company's stock valued at $1,554,000 after purchasing an additional 25 shares during the last quarter. Annis Gardner Whiting Capital Advisors LLC boosted its stake in Synopsys by 16.9% during the 4th quarter. Annis Gardner Whiting Capital Advisors LLC now owns 180 shares of the semiconductor company's stock valued at $85,000 after purchasing an additional 26 shares during the last quarter. Finally, MCF Advisors LLC increased its holdings in Synopsys by 17.8% during the 4th quarter. MCF Advisors LLC now owns 172 shares of the semiconductor company's stock worth $81,000 after purchasing an additional 26 shares in the last quarter. 85.47% of the stock is owned by institutional investors and hedge funds.

Synopsys Trading Up 9.0%

The stock has a market capitalization of $85.59 billion, a PE ratio of 103.40, a P/E/G ratio of 2.40 and a beta of 1.23. The firm has a 50 day moving average price of $416.71 and a 200 day moving average price of $439.84. The company has a quick ratio of 1.32, a current ratio of 1.43 and a debt-to-equity ratio of 0.33.

About Synopsys

Synopsys, Inc is a leading provider of electronic design automation (EDA) software and semiconductor intellectual property (IP) used to design, verify and manufacture integrated circuits and complex systems-on-chip (SoCs). Its product portfolio spans tools and technologies for front‑end design and synthesis, simulation and verification, physical implementation and signoff, and design-for-manufacturability, enabling chip designers to move from architecture through tape‑out.

In addition to core EDA offerings, Synopsys supplies a broad set of semiconductor IP building blocks — such as interface, memory and analog/mixed-signal cores — that customers integrate into SoCs to accelerate development.

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