Analyst Note| Nupur Balain |
Narrow-moat Synopsys reported strong first-quarter results as guidance targets were exceeded across the board and both revenue and non-GAAP earnings beat consensus expectations. This quarter, Synopsys was able to capitalize on secular trends towards AI and high-performance compute, with innovations in its core EDA space, IP portfolio, and software integrity segment driving broad-based success across all geographies. Synopsys continues to perform in line with our long-term expectations; as a result, we are maintaining our $233 fair value per share estimate. With shares trading at $280 after hours, we believe the company is currently trading at a premium and recommend waiting for a pullback before investing.