Skip to Content

Synopsys Inc SNPS

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

Synopsys Overcomes Coronavirus Headwinds with Solid Q2 Results and Outlook; Shares Overvalued

Abhinav Davuluri, CFA Sector Strategist

Analyst Note

| Abhinav Davuluri, CFA |

Synopsys reported solid second-quarter results with revenue and earnings per share above the high-end of guidance. Orders were significantly greater than management’s expectations thanks to strength in digital design software. The firm maintained its full-year revenue outlook for fiscal 2020 (range of $3.60 billion-$3.65 billion) that implies 8% year-over-year growth at the midpoint. Despite ongoing geopolitical tensions (U.S.-China trade war) and the coronavirus outbreak, Synopsys continues to benefit from healthy design activity associated with key drivers such as artificial intelligence, automotive, 5G, Internet of Things, and cloud computing. Also, the firm boasts a noncancelable backlog of $4.8 billion.

Read Full Analysis

Company Profile

Business Description

Synopsys Inc was founded in December 1986 (it was called Optimal Solutions until 1987) and is a market leader in electronic design automation software. EDA is used to automate the design and verification of integrated circuits or larger chip systems. The firm provides an end-to-end workflow of EDA products. In addition, the firm offers a broad set of design intellectual property and leading software integrity tools that help customers develop secure, quality code. Historically, the firm's tools have been relied upon by semiconductor firms, but there has been a shift toward other nontraditional "systems" users (nonsemiconductor firms interested in chip design) given the development of the Internet of Things, artificial intelligence, autonomous vehicles, and cloud computing.

Contact
690 East Middlefield Road
Mountain View, CA, 94043
T +1 650 584-5000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Apr 30, 2020
Fiscal Year End Oct 31, 2020
Stock Type Aggressive Growth
Employees 13,896