Yahoo Finance Synopsys (SNPS) to Report Q2 Earnings: What's in the Offing?
Synopsys, Inc. SNPS is slated to report second-quarter fiscal 2024 results on May 22 after market close.
The company anticipates revenues between $1.56 billion and $1.59 billion for the fiscal second quarter. The Zacks Consensus Estimate is pegged at $1.51 billion, which suggests growth of 8.4% from the year-ago period's reported figure.
Synopsys expects non-GAAP earnings per share between $3.09 and $3.14. The Zacks Consensus Estimate of $3.03 per share indicates year-over-year growth of 19.3%.
The software company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.1%.
Let’s see how things have shaped up before the upcoming announcement.
Synopsys, Inc. Price and EPS Surprise
Synopsys, Inc. price-eps-surprise | Synopsys, Inc. Quote
Factors to Note
Synopsys’ second-quarter results are anticipated to reflect the growing demand for its comprehensive product portfolio. The increasing need for high-performance cloud computing, driven by the hybrid work environment, is expected to boost the demand for the company's Intellectual Property (“IP”) solutions, such as Peripheral Component Interconnect Express 5.0 & 6.0, 800G Ethernet and DDR5 memory.
The expanding applications of artificial intelligence (AI), the Internet of Things (IoT), 5G, high-performance computing, cloud technology and automotive sectors are likely to have spurred demand for Synopsys’ advanced solutions in the second quarter. Significant growth in the Fusion Compiler, propelled by major deals in the 5G, AI, and server chip markets, is expected to be a key contributor to this demand.
The increased adoption of Synopsys.ai among chip manufacturers and vendors is likely to have driven top-line growth during the reported quarter. Additionally, the extended partnership with Intel, aimed at enhancing Synopsys' fabrication processes using the company's electronic design automation (EDA), IP and multi-die systems, is expected to play a pivotal role.
Global design activity and user engagement are anticipated to have been significant growth drivers for Synopsys in the fiscal second quarter. The rising adoption of the company's interface and foundation IP solutions is likely to have boosted revenues within Synopsys’ interface portfolio. Moreover, numerous contract wins and the growing adoption of the Fusion Platform, including the Fusion Compiler, are expected to positively impact the company’s second-quarter results.
Synopsys’ strategic partnerships with industry leaders such as Microsoft and Taiwan Semiconductor Manufacturing Company are likely to have enhanced the deployment of its cloud solutions, contributing to revenue growth during the quarter under review.
The robust base of Synopsys’ EDA software partners, including Juniper Networks, Realtek, Advanced Micro Devices, Toshiba and Wolfson, is expected to be a major revenue driver. Additionally, increased design investments in Synopsys’ ARC processors by automotive companies, as well as the strong adoption of security solutions for interfaces like CXL, PCI Express and DDR, with more than 30 design wins across various market segments, are expected to positively influence the company’s performance.
However, rising competition from companies such as Cadence Design Systems might have posed challenges for Synopsys. Moreover, tightening budgets among corporations due to ongoing macroeconomic challenges and unfavorable currency exchange rates are expected to partially offset the positive impacts of the aforementioned growth factors.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Synopsys this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
SNPS currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, NVIDIA NVDA, Zscaler ZS and Agilent Technologies A have the right combination of elements to post an earnings beat in their upcoming releases.
NVIDIA carries a Zacks Rank #2 and has an Earnings ESP of +3.62%. The company is scheduled to report first-quarter fiscal 2025 results on May 22. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 20.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s first-quarter earnings stands at $5.48 per share, which indicates a year-over-year improvement of 402.8%. It is estimated to report revenues of $24.27 billion, which suggests a jump of approximately 237.5% from the year-ago quarter.
Zscaler carries a Zacks Rank #2 and has an Earnings ESP of +0.39%. The company is slated to report third-quarter fiscal 2024 results on May 30. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 28.2%.
The Zacks Consensus Estimate for Zscaler’s third-quarter earnings is pegged at 65 cents per share, which indicates a year-over-year increase of 35.4%. The consensus mark for revenues stands at $535.6 million, which calls for a year-over-year rise of 27.9%.
Agilent Technologies is slated to report second-quarter fiscal 2024 results on May 29. The company has a Zacks Rank #3 and an Earnings ESP of +0.42% at present. Agilent Technologies’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.5%.
The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.19 per share, which suggests a decrease of 6.3% from the year-ago quarter’s earnings of $1.27. Agilent Technologies’ quarterly revenues are estimated to decline 8% to $1.58 billion from $1.72 billion in the year-ago quarter.
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NVIDIA Corporation (NVDA) : Free Stock Analysis Report
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