Synopsys Hits Record Backlog In Q4, Analysts Elevate Price Targets Citing Fundamental Strength
Portfolio Pulse from Nabaparna Bhattacharya
Synopsys, Inc (NASDAQ:SNPS) sees a record backlog of $8.6 billion in Q4, with analysts from Needham, KeyBanc Capital Markets, and Stifel raising their price targets due to the company's strong performance and fundamental strength. Synopsys reported a 25% year-over-year increase in quarterly revenue at $1.599 billion and provided an FY24 outlook with 13% revenue growth and operating margin expansion. The company is exploring strategic alternatives for its Software Integrity business and maintains a strong position in the EDA and IP sectors, particularly for AI startups. Despite trading lower, analysts justify the premium valuation due to the company's recurring business model and industry-leading profitability.
November 30, 2023 | 6:58 pm
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POSITIVE IMPACT
Synopsys reported a strong Q4 with a record backlog and revenue growth, leading to raised price targets by analysts. The company's strategic review of its Software Integrity business and its leading role in EDA and IP sectors are key highlights.
The record backlog and raised price targets by multiple analysts indicate strong fundamental strength and positive future expectations for Synopsys. The strategic review of the Software Integrity business could lead to a more focused and efficient operation, potentially unlocking value. Although the stock is trading lower, the overall analyst sentiment is positive, suggesting a likely increase in stock price in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100