Synopsys to Report Q2 Earnings: What's in Store for the Stock?

Synopsys SNPS is scheduled to report second-quarter fiscal 2026 results on May 27, after market close.Synopsys expects non-GAAP earnings per share between $3.11 and $3.17. The Zacks Consensus Estimate for fiscal second-quarter earnings is pinned at $3.17 per share, which indicates a year-over-year decrease of 13.6%.The company anticipates revenues between $2.225 billion and $2.275 billion for the fiscal second quarter. The Zacks Consensus Estimate is pegged at $2.25 billion, which suggests a rise of 40.3% from the year-ago period's reported figure.In the trailing four quarters, SNPS’ earnings surpassed the Zacks Consensus Estimate thrice while missing the same on one occasion, with an average surprise of 1.5%.Synopsys, Inc. Price and EPS Surprise Synopsys, Inc. price-eps-surprise | Synopsys, Inc. QuoteFactors Influencing Synopsys’ Q2 ResultsSynopsys is gaining from the multi-trillion-dollar AI infrastructure expansion, which is driving complex AI semiconductor demand and the need for advanced design tools. Increased adoption of Synopsys.ai among chip manufacturers and vendors is anticipated to have boosted top-line growth during the reported quarter.The increasing use of AI, IoT, 5G and cloud technology is likely to have driven demand for Synopsys’ solutions in the to-be-reported quarter. Robust design investments in Synopsys’ ARC processors by automotive companies, as well as the strong adoption of security solutions for interfaces like CXL, PCI Express and DDR, are likely to aid its second-quarter results.Given its strong portfolio, SNPS is likely to have gained from the strong bookings momentum and revenue visibility in the to-be-reported quarter. The acquisition of Ansys has already enabled Synopsys to bridge digital and physical design, creating cross-sell potential that is likely to have driven SNPS’ top-line growth in the fiscal second quarter.However, weakness in consumer, automotive and industrial markets, where the company is witnessing subdued demand for design starts, is likely to have remained a headwind in the fiscal second quarter. Further, Synopsys’ Intellectual Property (IP) business is also going through a transitional phase, where any delays in delivering certain IP titles and execution challenges related to hyperscaler engagements could weigh on the company’s overall growth in the second quarter.Further, tightening budgets among corporations due to ongoing macroeconomic challenges and unfavorable currency exchange rates are expected to have partially offset the positive impacts of the growth drivers. SNPS is also struggling in Chinese markets, which might have posed an investor concern in the to-be-reported quarter.What Our Model Says About SNPSOur proven model does not conclusively predict an earnings beat for SNPS this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.SNPS has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks to ConsiderHere are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:Dell Technologies DELL has an Earnings ESP of +3.51% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Dell Technologies is set to report first-quarter fiscal 2027 results on May 28. The Zacks Consensus Estimate for Dell Technologies’ first-quarter fiscal 2027 earnings is pegged at $3.00 per share, up by 3 cents over the past seven days, indicating a rise of 93.6% from the year-ago quarter’s reported figure.Salesforce, Inc. CRM has an Earnings ESP of +1.40% and carries a Zacks Rank #2 at present.Salesforce is scheduled to report first-quarter fiscal 2027 results on May 27. The Zacks Consensus Estimate for Salesforce’s first-quarter fiscal 2027 earnings is pegged at $3.12 per share, unchanged over the past 30 days, indicating a rise of 20.9% from the year-ago quarter’s reported figure.Autodesk ADSK has an Earnings ESP of +0.35% and carries a Zacks Rank of 3 at present.Autodesk is slated to report first-quarter fiscal 2027 results on May 28. The Zacks Consensus Estimate for ADSK’s first-quarter fiscal 2027 earnings is pegged at $2.84 per share, unchanged over the past 30 days, indicating a rise of 24% from the year-ago quarter’s reported figure.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks