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Synopsys (SNPS) to Report Q4 Earnings: What's in the Offing?

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Synopsys (SNPS - Free Report) is slated to report fourth-quarter fiscal 2021 results on Dec 1.


The company anticipates revenues between $1.138 billion and $1.168 billion for the fiscal fourth quarter. The Zacks Consensus Estimate for the same is pegged at $1.15 billion, suggesting growth of 12.3% from the year-ago period.


Synopsys expects non-GAAP earnings between $1.75 and $1.80 per share. The Zacks Consensus Estimate of $1.78 earnings per share indicates an improvement of 12.7% year over year.


The software company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.8%.

Synopsys, Inc. Price and EPS Surprise Synopsys, Inc. Price and EPS Surprise

Synopsys, Inc. price-eps-surprise | Synopsys, Inc. Quote

Factors to Note

Rising impact of artificial intelligence, 5G, internet of things, high-performance computing and the Cloud, and automotive is anticipated to have favored demand for Synopsys’ advanced solutions in the fiscal fourth quarter.


Besides, Synopsys has been benefiting from growing demand for its solid product portfolio. Increasing global design activity and customer engagements might have acted as growth drivers in the quarter under review.


With the ongoing shift to high-performance cloud computing owing to the pandemic-induced remote working environment, demand for Synopsys’ Intellectual Property (“IP”) solutions, such as PCI Express 5.0 & 6.0, 800G Ethernet, 112G Ethernet and DDR5, have been growing. This is anticipated to get reflected in the fiscal fourth-quarter results.


Strong adoption of interface and foundation IP solutions is expected to have boosted revenues for the company’s interface portfolio. Additionally, widespread contract wins and the increasing deployment of the Fusion Platform, including Fusion Compiler, are likely to have driven the to-be-reported quarter’s performance.


Synopsys’s partnership with industry leaders like Microsoft and Taiwan Semiconductor Manufacturing Company are expected to have accelerated the deployment of its cloud solutions, thereby might have aided the company’s top line during the quarter under review.


The company’s solid electronic design automation software partner base, which includes Advanced Micro Devices, Juniper Networks, Realtek, Toshiba and Wolfson, is likely to have served as a major revenue driver.


Increased design investments in Synopsys’s ARC processors by automotive companies, despite the pandemic-induced headwinds in the automotive space, bode well. Besides, geopolitical challenges, coupled with uncertainties related to restrictions over trade with Huawei Technologies, might have adversely impacted overall business during the fiscal fourth quarter.

What Our Model Unveils

Our proven model does not conclusively predict an earnings beat for Synopsys this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Synopsys currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combinations

Per our model, Lululemon Athletica (LULU - Free Report) , AutoZone (AZO - Free Report) and Snowflake (SNOW - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.

Lululemon is set to report third-quarter fiscal 2022 results on Dec 9. The stock has a Zacks Rank #2 and an Earnings ESP of +1.44%. Lululemon’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.2%.

The Zacks Consensus Estimate for quarterly earnings is pegged at $1.39 per share, suggesting year-over-year improvement of 19.8%. LULU’s quarterly revenues are estimated to increase 28.1% year over year to $1.43 billion.

AutoZone has a Zacks Rank #2 and an Earnings ESP of +2.78%. The company is scheduled to report first-quarter fiscal 2022 results on Dec 7. AZO’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.6%.

The Zacks Consensus Estimate for AutoZone’s first-quarter earnings is pegged at $20.65 per share, suggesting a 11% improvement from the year-ago quarter’s figure. The consensus mark for revenues stands at $3.33 billion, suggesting year-over-year growth of 5.6%.

Snowflake has a Zacks Rank #3 and an Earnings ESP of +1.82%. The company is scheduled to report third-quarter fiscal 2022 results on Dec 1. SNOW’s earnings have surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missed thrice, the average negative surprise being 2.5%.

The Zacks Consensus Estimate for Snowflake’s third-quarter bottom line is pegged at a loss of 6 cents per share, suggesting an improvement from the year-ago quarter’s loss of 28 cents. The consensus mark for revenues stands at $304 million, suggesting year-over-year growth of 90.5%.

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