Synopsys stock prediction after guiding FQ1 and FY2022 results above expectations

on Dec 3, 2021
  • Synopsys shares on Friday edged lower 1.2%, trimming Thursday’s gains.
  • The company reported its FQ4 results ón Wednesday after markets closed.
  • Synopsys’ most recent quarterly earnings outperformed estimates.

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On Friday, Synopsys Inc. (NASDAQ:SNPS) shares declined by 1.2%, trimming Thursday’s post-earnings gains. The company announced its most recent quarterly results Wednesday after markets closed, beating the consensus for analyst expectations on earnings. On the other hand, its quarterly revenue was in line with Street forecasts.

Synopsys posted fiscal fourth-quarter non-GAAP earnings per share of $1.82, beating the average for analyst estimates of $1.79. On the other hand, its GAAP EPS of $1.28 outperformed the Street forecast of $1.16, while revenue for the quarter grew by 11.7% from the same quarter in 2020 to $$1.15 billion, in line with estimates.

Looking forward

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Synopsys now expects FQ1 and full-year 2022 revenue in the range of $1.25 billion to $1.28 billion, and $4.725 billion to $4.775 billion, respectively compared to the average Street forecasts of $1.1 billion and $4.63 billion.

It also forecasts FQ1 and FY2022 EPS at about $2.35-$2.40 and $7.73-$7.80, respectively versus the consensus analyst estimates of $$1.76 and $7.65.

Although Synopsys shares seem to be trading at steep valuation multiples, analysts expect its earnings per share to grow at an average annual rate of nearly 17% over the next five years. Therefore, it could be a compelling option for long-term growth investors.

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Technically, Synopsys shares seem to have recently pulled back to trade below the ascending channel formation in the intraday chart.

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Therefore, with the stock creating more space for upward movement, investors could target rebound profits at about $357.51, or higher at $371.82.

On the other hand, if the bearish run continues, it could find support at about $334.10, or lower at $319.15.


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