Key Stats for Synopsys Stock
- Price Change for $SNPS stock: -22%
- Current Share Price: $471
- 52-Week High: $652
- $SNPS Stock Price Target: $653
What Happened?
Synopsys (SNPS) stock is down 22% following third-quarter results that missed Wall Street expectations, primarily due to weakness in the company’s Design IP business.
The chip design software provider reported revenue of $1.74 billion versus analyst estimates of $1.77 billion, while adjusted earnings per share came in at $3.39, below the expected $3.74.
The underperformance was driven by deals that failed to materialize in the Design IP segment, which CEO Sassine Ghazi attributed to three key factors 👇
- New export restrictions that disrupted design starts in China
- Challenges at a major foundry customer, and
- Internal roadmap and resource allocation decisions that didn’t yield the intended results
Synopsys had made substantial investments in building IP for a major foundry customer, with expectations of returns in the second half of 2025. However, the customer pulled out due to market and client-related reasons.
This represents a strategic setback as the company had allocated significant resources to this partnership.
See analysts’ growth forecasts and price targets for Synopsys stock (It’s free!) >>>
What the Market Is Telling Us About SNPS Stock
The sharp sell-off in SNPS stock reflects investor concerns about execution issues in a historically strong segment during a period when Synopsys is also integrating its massive $35 billion Ansys acquisition.
Design IP revenue fell 8% year-over-year, a surprising weakness given the company’s leadership position and strong demand for AI-related semiconductor design tools.
Management acknowledged that they had “aggressive plans” for IP in fiscal 2025, following strong growth in prior years (24% and 17%, respectively), but missed signals during what CEO Ghazi called a “hyper and intense period” while focusing on closing the Ansys deal.
The company expects continued headwinds and described the upcoming year as “transitional and muted” for the IP business.
However, Synopsys did provide some optimism with Q4 revenue guidance of $2.23-$2.26 billion, above analyst expectations of $2.09 billion, reflecting the inclusion of Ansys for a full quarter.
Synopsys also announced plans to reduce global headcount by approximately 10% by the end of fiscal 2026 to improve efficiency and realign resources toward higher-growth opportunities.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!