Synopsys, Inc. (NASDAQ:SNPS) stock fell Thursday after the company reported first-quarter results.
Also, the company cut its fiscal 2026 GAAP EPS guidance below estimates and issued second-quarter sales guidance below estimates.
Earnings Snapshot
Synopsys reported adjusted EPS of $3.77 per share, which beat the Street estimate of $3.56.
Quarterly revenue came in at $2.41 billion, which exceeded the consensus estimate of $2.39 billion.
Sassine Ghazi, president and CEO of Synopsys, said, “AI continues to fuel robust system-level and semiconductor R&D, and the increasing AI capabilities throughout our portfolio strengthen our strategic advantage and accelerate our customers’ innovation.”
Buyback
In addition, Synopsys disclosed that its board of directors approved a replenishment of the existing stock repurchase program with authorization to buyback up to $2.0 billion of common shares.
Outlook
Synopsys raised fiscal 2026 adjusted EPS guidance to $14.38-$14.46 (from $14.32-$14.40 earlier) versus consensus of $14.38.
Meanwhile, the company reiterated its fiscal 2026 sales outlook at $9.560 billion-$9.660 billion versus $9.627 billion estimate.
The company sees second quarter adjusted EPS of $3.11-$3.17 (versus the Street view of $3.09) and sales of $2.225 billion-$2.275 billion versus $2.236 billion consensus estimate.
Significant Price Cut
Piper Sandler analyst Clarke Jeffries slashed the price forecast to $430 from $520, while keeping a Neutral rating.
The analyst writes that first-quarter results were largely uneventful, with a sub-1% revenue beat and unchanged fiscal 2026 guidance, aside from higher EPS driven by accelerated debt reduction.
Investors looking for a sharper rebound in IP revenue were disappointed, as revenue was flat sequentially, though management expects growth to resume through the remainder of the year, with some tailwinds skewed toward the fourth quarter, adds the analyst.
The analyst says that China’s revenue excluding ANSS edged lower, reflecting the ongoing effects of technology restrictions.
SNPS Price Action: Synopsys shares were down 3.44% at $433.72 at the time of publication on Thursday, according to Benzinga Pro data.
Photo by Sundry Photography via Shutterstock
