SNPS Stock: Synopsys Falls On Weak Guidance

Chip design software maker Synopsys (SNPS) late Wednesday delivered better-than-expected earnings on in-line sales for its fiscal first quarter. But it guided lower than views for the current quarter. SNPS stock fell in extended trading.

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The Mountain View, Calif.-based company earned an adjusted $2.62 a share on sales of $1.36 billion in the quarter ended Jan. 31. Analysts polled by FactSet had expected earnings of $2.50 a share on sales of $1.36 billion. On a year-over-year basis, Synopsys earnings rose 9% while sales advanced 7%.

For the current quarter ending April 30, Synopsys predicted adjusted $2.48 a share earnings on sales of $1.375 billion. That’s based on the midpoint of its guidance. Wall Street was forecasting earnings of $2.56 a share on sales of $1.43 billion in the fiscal second quarter.

For the fiscal year ending Oct. 31, Synopsys expects to earn an adjusted $10.57 a share on sales of $5.8 billion. Analysts had been looking for earnings of $10.38 a share on sales of $5.81 billion.

SNPS Stock Is A Recent Breakout

“Synopsys delivered a solid start to the year,” Chief Executive Aart de Geus said in a news release. “Based on the continued robust design activity, we remain confident in our business.”

In after-hours trading on the stock market today, SNPS stock fell 3.7% to 365.50. During the regular session Wednesday, SNPS stock rose 0.9% to close at 379.48.

On Feb. 1, SNPS stock broke out of a cup-with-handle base at a buy point of 364.09, according to IBD MarketSmith charts.

The company ranks third out of 12 stocks in IBD’s Computer Software-Design industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 93 out of 99.

IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

Also, SNPS stock is in the IBD Long-Term Leaders Portfolio, along with industry peer Cadence Design Systems (CDNS).

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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