Synopsys Stock Sinks On Light FY25 Revenue Guidance: Retail Sentiment Plummets

Sunnyvale, California-based Synopsys, Inc. ($SNPS), a supplier of tools and services for the semiconductor industry, announced fiscal year 2024 fourth-quarter results that exceeded expectations. However, the stock retreated on a lackluster revenue outlook for fiscal year 2025.

The company reported fourth-quarter non-GAAP earnings per share (EPS) of $3.40, exceeding the consensus of $3.30 and the year ago’s $3.00

Snyopsys’ revenue was a record $1.64 billion, up 11% year-over-year (YoY), also above the average analysts’ estimate of $1.63 billion.

Sassine Ghazi, president and CEO of Synopsys, said, “The fourth quarter was a strong finish to a transformational year for Synopsys. We achieved record financial results while doubling down on our strategy with the sale of our Software Integrity business and the pending acquisition of Ansys.”

Looking ahead, Synopsys guided fiscal year 2025 first-quarter non-GAAP EPS to $2.77-$2.82 and revenue to $1.435 billion-$1.465 billion. According to Yahoo Finance data, analysts, on average, expect the numbers to be $2.79 billion and $1.47 billion, respectively.

The company guided full-year 2025 non-GAAP EPS between $14.88 and $14.96 and revenue to range between $6.745 billion and $6.805 billion. 

Stocktwits data showed that the consensus estimates are at $14.89 billion and $6.84 billion, respectively.

At last check, Synopsys stock was down 9.71% at $530.93.  Baird analyst Joe Vruwink attributed the adverse stock reaction to the headline revenue miss. He, however, said the stock pullback is a good buying opportunity.

“While the underlying growth of ~11.5-12.5% YoY is ~100bp below our expectation, there appears to be added pragmatism in this framework, creating future opportunity should fundamentals/ execution progress as we expect,” the analyst said.

Vrunwink maintained an ‘Outperform’ rating on Synopsys stock and reduced the price target from $644 to $630.

 SNPS sentiment and message volume December5, 2024, as of 10:21 am ET | Source: Stocktwits

Retail mood toward the stock was ‘extremely bearish’ (4/100), the lowest in a year, down from the ‘extremely bullish’ mood that prevailed a day ago. Message volume remained ‘extremely high.’

The stock has gained about 14% for the year.

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