Synopsys, Inc. (SNPS, Financial), a supplier of tools and services for the semiconductor industry, based in Sunnyvale, California, cannot please everyone. The company just announced its fiscal year 2024 fourth-quarter results that exceeded expectations. However, the shares fell by 12.35% to $515.36 as investors reacted poorly to lower revenues guidance for Fiscal Year 2025.
Key Highlights:
- Q4 2024 Results
Non-GAAP earnings per share (EPS) of $3.40, exceeding the consensus of $3.30 and last year's $3.00. Record revenue of $1.64 billion, up 11% year-over-year (YoY), above analysts' estimate of $1.63 billion.
- CEO Statement:
Sassine Ghazi, President and CEO, highlighted the strong finish to a transformational year, including the sale of their Software Integrity business and the pending acquisition of Ansys.
- FY 2025 Guidance:
- Q1 non-GAAP EPS: $2.77-$2.82 (analysts expected $2.79 billion).
- Q1 revenue: $1.435 billion-$1.465 billion (analysts expected $1.47 billion).
- Full-year non-GAAP EPS: $14.88-$14.96 (analysts expected $14.89 billion).
- Full-year revenue: $6.745 billion-$6.805 billion (analysts expected $6.84 billion).
- Analyst View:
Currently, Joe Vruwink of Baird believes that the dip is a buying opportunity; notwithstanding, his ‘Outperform' rating coupled with the $644 price target have been adjusted to $630.
The GFscore of Synopsys is very high, it is 94 out of 100, indicating that company has strong financial position with good revenue growth, while it is slightly overpriced. The fact that the company is highly profitable meanwhile also strengthens its position in the market.
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