Goldman Sachs initiates Synopsys stock coverage with Buy rating
Investing.com
Published Jul 10, 2025 06:19AM ET
Investing.com - Goldman Sachs initiated coverage on Synopsys (NASDAQ:SNPS) with a Buy rating and a price target of $620.00 on Thursday. According to InvestingPro data, the company maintains impressive gross profit margins of 81.4% and demonstrates strong financial health with a GOOD overall rating.
The investment bank identified Synopsys as a "critical provider of semiconductor design software tools" with exposure to multiple growth drivers throughout the industry.
Goldman Sachs noted a broadening customer base is driving outsized growth in the company's intellectual property franchise, while physical electronic design automation (EDA) represents a meaningful growth opportunity.
The firm acknowledged ongoing potential headline risk from China export restrictions that could affect the company.
Goldman Sachs also viewed Synopsys' pending acquisition of Ansys (NASDAQ:ANSS) as a "potential strategic positive" for the company.
In other recent news, Synopsys Inc . announced the suspension of its financial guidance for the third quarter and the full fiscal year of 2025 due to new export restrictions related to China. Before this suspension, Synopsys had projected third-quarter revenue between $1.755 billion and $1.785 billion, with non-GAAP earnings per share expected to range from $3.82 to $3.87. The company also reaffirmed its full-year revenue guidance of $6.745 billion to $6.805 billion. Meanwhile, Synopsys reported strong financial results for its second fiscal quarter, with adjusted earnings per share of $3.67, surpassing analyst estimates of $3.39. The company's revenue for the quarter reached $1.604 billion, slightly above the consensus estimate and marking a 10.2% year-over-year increase. In other developments, the U.S. Department of Commerce rescinded export restrictions related to China, allowing Synopsys to restore access to previously restricted products. Additionally, Synopsys and Samsung (KS:005930) Foundry have strengthened their collaboration to advance chip designs, achieving a successful customer tape out of an HBM3 design on Samsung's SF2 process. The planned $35 billion merger between Synopsys and Ansys has been postponed by China's market regulator, following tightened chip export controls by the U.S. government.
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