Synopsys (SNPS) Stock Forecast & Price Target

Synopsys is poised for significant revenue growth, with projected increases of approximately 36.6% in FY26, reaching around $9.637 billion, and a continued positive trajectory into FY27 with an estimated growth rate of about 10.7%. The integration of Ansys is expected to contribute substantially, with a forecasted double-digit revenue growth attributed to strong demand within the aerospace sector. Furthermore, the company's robust product portfolio positions it favorably amidst the trends of semiconductor companies expanding their technological capabilities, suggesting strong future prospects for both revenue and operating margins.

Synopsys experienced a significant decline in IP revenue, reporting $407 million for the quarter, reflecting a 21% year-over-year drop, which diverged from the more pessimistic forecast of a 23% decline. The company faces a challenging outlook with expectations of muted growth in the IP segment, revised revenue forecasts for FY26 and FY27, and a broader slowdown in the EDA market projected to a high single-digit CAGR, potentially impacting operating margin targets. Furthermore, the weaker-than-expected performance in the Chinese market and the decision to review and possibly exit certain lower-growth product lines contribute to a negative sentiment surrounding Synopsys's future financial performance.