Synopsys, Inc. (SNPS) is set to report fourth-quarter earnings results after the market closes on Wednesday, December 10. If you're wondering what Wall Street's sharpest minds are thinking, the answer is complicated—and recently revised.
The consensus estimate calls for quarterly earnings of $2.88 per share, which would represent a decline from $3.40 per share in the year-ago period. Revenue expectations are considerably brighter: analysts project $2.24 billion for the quarter, up substantially from last year's $1.64 billion.
The Sunnyvale, California-based company got a nice vote of confidence on December 1, when NVIDIA (NVDA) announced it was expanding its long-standing partnership with Synopsys to push the boundaries of modern engineering and product development. That's the kind of news that tends to matter when you're in the business of selling design software to chipmakers.
Shares of Synopsys closed essentially flat on Tuesday, rising just 0.02% to $465.85.
What the Smart Money Is Saying
Let's look at how Wall Street's most accurate analysts have been repositioning ahead of the earnings release. These aren't just any analysts—these are the ones with proven track records for getting their calls right.
Rosenblatt's Blair Abernethy upgraded the stock from Neutral to Buy on December 9, though he cut his price target from $605 to $560. This analyst has a 71% accuracy rate, so when he turns more bullish, people tend to notice.
B of A Securities analyst Vivek Arya also upgraded his rating on December 8, moving from Underperform to Neutral. He trimmed his price target from $525 to $500. With an 82% accuracy rate, Arya is one of the sharper pencils in the box.
Citigroup's Kelsey Chia initiated coverage with a Buy rating and a $580 price target on November 24. Chia's accuracy rate stands at 68%.
Mizuho analyst Siti Panigrahi maintained an Outperform rating on September 11 but lowered his price target from $700 to $600. His accuracy rate is 60%.
Stifel's Ruben Roy kept his Buy rating on September 10 but slashed his price target from $650 to $550. Here's the kicker: Roy has an 88% accuracy rate, making him one of the most reliable voices covering the stock.
Notice a pattern? Analysts are maintaining or upgrading their ratings while simultaneously cutting price targets. That tells you something about the current environment—there's optimism about the business fundamentals, but expectations about valuation have clearly been recalibrated.