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.
Synopsys stock (NASDAQ: SNPS), a frontrunner in electronic design automation (EDA) software and semiconductor intellectual property, recently experienced an 11% stock spike over the course of a week, following the announcement of a $2 billion equity investment from Nvidia. This investment serves a strategic purpose, aimed at enhancing the existing partnership between the two firms to advance AI-driven chip design tools.
Synopsys (SNPS) stock ought to be on your radar. Here is why – it is presently trading in the support realm ($416.38 – $460.20), levels from which it has bounced significantly before.
Synopsys, Inc. is known for its pivotal role in the generative AI and semiconductor ecosystem. The Ansys acquisition creates a software powerhouse, with management targeting double-digit revenue and high-teens EPS growth long-term. Nvidia's $2 billion investment and strategic partnership is an important vote of confidence.