Synopsys (SNPS) Delivers Despite Tough Environment – Needham & Company

Needham & Company reiterated a Buy rating on Synopsys (NASDAQ: SNPS), and raised the price target to $54.00 (from $53.00), following the company's 4Q earnings report. SNPS delivered solid top and bottom line results in 4Q15. Management acknowledged the high level of recent semi M&A as a potential headwind, but noted they felt they had prudently allowed for it in their guidance and that acquisitions could represent opportunities for share gain. The company also issued initial F16 guidance that was slightly below consensus. Results of $587MM and $0.67 NG EPS beat consensus of $577MM and $0.66, respectively. EPS upside was aided by $0.03 from a lower tax rate.

Analyst Richard Valera commented, "Against a challenging backdrop, SNPS delivered solid top and bottom line results in 4Q15. The company also issued initial F16 guidance that was slightly below consensus, as it not surprisingly noted it was trying to prudently allow for slower semi growth and likely headwinds from semi M&A. While acknowledging the possibility that semi M&A has a greater than foreseen impact on the business, for now we see it as a real but likely manageable headwind for the business. We maintain our Buy rating while increasing our PT to $54 (was $53), or ~15 ex -cash F17 NG EPS, as we shift out our base EPS year but lower our multiple."

For an analyst ratings summary and ratings history on Synopsys click here. For more ratings news on Synopsys click here.

Shares of Synopsys closed at $50.03 yesterday.

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