Synopsys (NASDAQ:SNPS) Trading Up 8.7% Following Strong Earnings

Synopsys, Inc. (NASDAQ:SNPS) shares rose 8.7% on Thursday after the company announced better than expected quarterly earnings. The stock traded as high as $442.55 and last traded at $445.7070. 679,983 shares traded hands during mid-day trading, a decline of 66% from the average daily 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. Synopsys had a return on equity of 5.83% and a net margin of 8.91%.The business had revenue of $2.48 billion for the quarter, compared to analysts’ expectations of $2.44 billion. During the same period last year, the business earned $3.39 EPS. The business’s revenue was up 42.4% on a year-over-year basis. Synopsys has set its Q4 2026 guidance at 4.100-4.160 EPS and its FY 2026 guidance at 15.040-15.100 EPS.

More 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.

Wall Street Analyst Weigh In

Several research firms recently weighed in on SNPS. Berenberg Bank set a $633.00 price target on shares of Synopsys in a research report on Wednesday, May 27th. Weiss Ratings reissued a “hold (c-)” rating on shares of Synopsys in a research report on Monday, June 8th. Benchmark reissued a “buy” rating and set a $570.00 price objective on shares of Synopsys in a report on Thursday. Zacks Research downgraded shares of Synopsys from a “strong-buy” rating to a “hold” rating in a report on Friday, August 21st. Finally, Wells Fargo & Company cut their price objective on shares of Synopsys from $535.00 to $450.00 and set an “equal weight” rating for the company in a research report on Tuesday, August 11th. Twelve investment analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $560.76.

Insider Activity

In other Synopsys news, CFO Shelagh Glaser sold 3,394 shares of the firm’s stock in a transaction dated Friday, June 12th. The stock was sold at an average price of $450.02, for a total value of $1,527,367.88. Following the sale, the chief financial officer owned 14,358 shares of the company’s stock, valued at $6,461,387.16. This trade represents a 19.12% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sassine Ghazi sold 14,603 shares of Synopsys stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $458.96, for a total value of $6,702,192.88. Following the sale, the chief executive officer owned 75,020 shares of the company’s stock, valued at approximately $34,431,179.20. This trade represents a 16.29% decrease in their position. 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. 0.56% of the stock is owned by insiders.

Institutional Investors Weigh In On Synopsys

Several hedge funds have recently bought and sold shares of the stock. Sankala Group LLC bought a new stake in Synopsys in the 4th quarter worth approximately $25,000. Elevation Wealth Partners LLC raised its stake in shares of Synopsys by 96.4% during the second quarter. Elevation Wealth Partners LLC now owns 55 shares of the semiconductor company’s stock worth $25,000 after acquiring an additional 27 shares in the last quarter. Osbon Capital Management LLC bought a new stake in shares of Synopsys in the 2nd quarter worth approximately $25,000. IMG Wealth Management Inc. bought a new stake in shares of Synopsys in the 2nd quarter worth approximately $28,000. Finally, Caitong International Asset Management Co. Ltd purchased a new stake in shares of Synopsys in the 4th quarter valued at $28,000. 85.47% of the stock is currently owned by institutional investors.

Synopsys Stock Performance

The company has a current ratio of 1.43, a quick ratio of 1.32 and a debt-to-equity ratio of 0.33. The company’s fifty day moving average is $416.71 and its 200 day moving average is $439.84. The company has a market cap of $85.59 billion, a P/E ratio of 103.40, a price-to-earnings-growth ratio of 2.40 and a beta of 1.23.

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.