Baird increased its rating on Synopsys to Outperform from Neutral and raised the price target to $560 from $558, citing accelerating revenue momentum and a projected return to double-digit organic growth in fiscal 2027.
The upgrade follows Synopsys’ fiscal third-quarter results, which exceeded expectations with non-GAAP earnings of $3.91 per share against a $3.67 per share consensus and revenue of $2.48 billion versus a $2.44 billion forecast. Trailing twelve-month revenue growth reached 39.5%, while gross margin held at 82.6%.
Baird’s valuation framework now applies a 25x multiple to earnings per share, up from the prior 20x but below the 23x expected for fiscal 2026 absent further beats and well below the 35x multiple at the start of the fiscal year. The firm anticipates organic revenue growth to rebound into double digits in fiscal 2027, supported by stronger IP engagements and the commercialization of Multiphysics Fusion.
Synopsys is scheduled to host an Investor Day on September 30, where management is expected to outline drivers across EDA software, Design IP and the Ansys integration, alongside updated financial guidance for fiscal 2027 and beyond.
