Synopsys jumps 8% as Baird sees it at 'beginning of decade of impact'
jejim
Synopsys (NASDAQ:SNPS) shares climbed more than 8% on Thursday after the electronic design automation company reported second-quarter results that topped expectations, prompting investment firm Baird to say it is at the "beginning of [a] decade of impact."
Analyst Joe Vruwink, who has an outperform rating on Synopsys (SNPS) shares, noted that the quarterly results and second-half outlook are concrete evidence that the company continues to "over-deliver" on its objectives.
"[F]ormal targets are for double-digit revenue growth, 100bp margin expansion, and mid-teens EPS growth, with [fiscal 2023] tracking ahead on all metrics," Vruwink wrote in an investor note.
Competitor Cadence Design Systems (CDNS) rose more than 5% in sympathy.
Vruwink added that the company has "good" design activity, despite the semiconductor downturn and the industry is now using advanced artificial intelligence tools to be used across the design flow.
"As it was characterized on the [fiscal second-quarter] call, this is still 'at the beginning of a decade of impact,' and we expect wider deployment will be beneficial to financial results going forward," Vruwink explained.
For the second-quarter, Synopsys (SNPS) earned an adjusted $2.54 per share as revenue rose 9.4% year-over-year to $1.39B. Analysts were expecting earnings of $2.47 per share, excluding one-time items on $1.38B in sales.
Looking ahead, Synposys (SNPS) expects third-quarter revenue to be within a range of $1.65B and $1.495B, with adjusted earnings between $2.70 and $2.75 per share. Analysts expect $1.48B in revenue and $2.68 per share in earnings.
For the full-year, Synposys (SNPS) is forecasting sales between $5.79B and $5.83B, with the mid-point above the $5.8B analysts are expecting.