Synopsys, Inc. SNPS is slated to release third-quarter fiscal 2020 results on Aug 19.
The company estimates quarterly revenues in the $875-$905 million band. The Zacks Consensus Estimate is pegged at $893.5 million, indicating year-over-year growth of 4.8%.
Management expects non-GAAP earnings per share between $1.33 and $1.38. The Zacks Consensus Estimate for the same is pinned at $1.35, suggesting a 14.4% year-over-year increase.
The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters, the beat being 10.5%, on average.
Let’s see how things have shaped up for this announcement.
Factors at Play
Synopsys’ fiscal third-quarter performance is likely to have benefited from growing demand for its solid product portfolio. Increasing global design activity and customer engagements are likely to have been growth drivers.
The rising impact of AI, 5G, IoT, Cloud and the proliferation of Smart Everything is anticipated to have boosted demand for the company’s advanced solutions. Synopsys’ performance is likely to have gained from growth in Custom Compiler, which is fueled by large deal wins in the 5G, AI and server chip markets.
Additionally, widespread contract wins and the increasing deployment of Fusion Platform, including Fusion Compiler, are anticipated to have been key growth drivers. Moreover, Synopsys’ Verification Continuum platform witnesses robust demand and competitive gains, which is anticipated to have been a major catalyst as well.
However, supply-chain and logistic disruptions due to the global lockdown might have thwarted the company’s quarterly performance. Apart from this, heightening competition from the likes of Cadence Design Systems might have played spoilsport.
What Our Model Says
Our proven model does not 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.
At present, Synopsys carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Agilent Technologies A has an Earnings ESP of +5.00% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autodesk ADSK has an Earnings ESP of +4.44% and carries a Zacks Rank of 3, currently.
Fabrinet FN has an Earnings ESP of +3.75 % and currently carries a Zacks Rank of 3.
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