Synopsys Set to Beat Revenue Expectations, Says KeyBanc Analyst Celino

KeyBanc's Jason Celino raised their price target on Synopsys (NASDAQ: SNPS) by 11.1% from $540 to $600 on November 27, 2023. The analyst maintained their Strong Buy rating on the stock.

Celino provided insights ahead of Synopsys's Q4 2023 earnings report, which is set to be released on November 29, 2023. In their analysis, Celino suggested that investors should expect a "modest" $5 million revenue beat, driven by the continued strength in the company's intellectual property (IP) and hardware segments.

The analyst emphasized the importance of monitoring the backlog metric, stating that KeyBanc expects it to remain flat. Any improvement in the backlog would be seen as a positive sign for the company.

Looking ahead, Celino predicted that Synopsys's management would initially guide conservative revenue growth for FY 2024, with a range of 12% to 13%. However, they anticipate the forecast to be raised throughout the year.

According to Celino, 100% of top-rated analysts currently rate SNPS as a Strong Buy or Buy. No analysts see it as a Hold, and none recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that SNPS's upcoming year will deliver earnings per share (EPS) of $6.76. If these predictions hold true, SNPS's next yearly EPS will be down by 0.4% on a year-over-year basis.

In terms of performance, since Synopsys's last quarterly report on July 31, 2023, the stock price has risen by 20.3%. On a year-over-year basis, the stock has seen a significant increase of 65.1%. During this period, SNPS has outpaced the S&P 500, which has shown a gain of 14.9%.

Jason Celino, the KeyBanc analyst, is ranked in the top 25% out of 4,414 Wall Street analysts by WallStreetZen. Celino boasts an average return of 0.7% and a win rate of 56.8%. Their areas of specialization include the Industrials and Real Estate sectors, among others.

Synopsys, Inc., based in Mountain View, California, offers electronic design automation software products used for designing and testing integrated circuits. The company's product portfolio includes the Fusion Design Platform, Verification Continuum Platform, FPGA design products, intellectual property (IP) solutions, and more. Synopsys serves various industries such as electronics, financial services, automotive, medicine, energy, and industrial sectors.

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