Synopsys NASDAQ: SNPS has turned the corner after a year of uncertainty. The company's guidance for Q4 fiscal year 2026 (FY2026) reveals accelerating integration of its services and stabilization of the business.
SNPS posts a Q4 beat as revenues surge on strong Time-Based, Upfront Product and EDA growth, while offering upbeat FY26 and Q1 outlooks.
Synopsys Inc (NASDAQ:SNPS, XETRA:SYP) has been upgraded by Bank of America to ‘Buy' from ‘Neutral,' with the firm pointing to better-than-expected fiscal 2026 earnings guidance and reduced risk tied to China and Intel. The firm also raised its price objective on the chip design firm to $560 from $500, above current levels of about $478.
Synopsys, Inc. (SNPS) Q4 2025 Earnings Call Transcript
Although the revenue and EPS for Synopsys (SNPS) give a sense of how its business performed in the quarter ended October 2025, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.
Synopsys (SNPS) came out with quarterly earnings of $2.9 per share, beating the Zacks Consensus Estimate of $2.79 per share. This compares to earnings of $3.4 per share a year ago.
All this dealmaking, much of which is quite circular, in the AI scene of late has really taken the AI bubble fears of some to the next level.
Bank of America upgraded Synopsys Inc (NASDAQ:SNPS, XETRA:SYP) to “Neutral” on Monday, saying the chip-design software maker's upcoming earnings call will be critical for rebuilding investor confidence after a weak patch in its intellectual property business and uncertainty tied to its Ansys acquisition. The brokerage raised its rating from “Underperform” but trimmed its price objective to $500 from $525, reflecting a 4% cut to its fiscal 2026 and 2027 earnings estimates.
Besides Wall Street's top-and-bottom-line estimates for Synopsys (SNPS), review projections for some of its key metrics to gain a deeper understanding of how the company might have fared during the quarter ended October 2025.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Synopsys is foundational to the semiconductor industry, providing essential EDA software and IP that underpin modern chip design and manufacturing. The company boasts a dominant market position, high switching costs, and tight integration with foundries, ensuring recurring and resilient revenue streams. The $35bn Ansys acquisition transforms the firm into an end-to-end design provider, expanding its TAM to $31bn and deepening customer lock-in via integrated simulation workflows.
Synopsys is rated Hold with a $475 price target, reflecting a 10% upside and market-like performance amid premium valuation and bottom-line headwinds. SNPS trades at a 32x forward P/E, a significant premium to peers, despite a 24% year-over-year EPS decline and mixed segment results. Core EDA business drives growth, but revenue concentration, margin erosion, and heavy leverage present risks if AI-driven demand or profitability falters.