Synopsys (NASDAQ: SNPS) shares were trading at $394.51 on Tuesday, ahead of the company’s third-quarter fiscal 2026 earnings release scheduled for August 26. Rosenblatt Securities reiterated its Buy rating and maintained a price target of $575, citing strong growth prospects tied to the $4.3 billion debt reduction from the Ansys acquisition completed in July 2025.
Analysts at Benchmark and KeyBanc also maintained positive outlooks, with price targets of $570 and $600 respectively. The firm’s projected revenue for the quarter ending July 31 is $2.435 billion, a 40% increase from the prior year. The Ansys acquisition contributed approximately 29% of total revenue in the second quarter of fiscal 2026, according to management disclosures.
Synopsys has shifted strategic focus toward higher-growth segments, including artificial intelligence-driven design tools under its Synopsys.ai suite. The company completed the sale of its ARC processor IP business to GlobalFoundries in June to streamline operations and reduce exposure to lower-margin segments. It also discontinued its manufacturing process control software to prioritize AI-related products, which impacts clients such as Samsung Electronics and SK Hynix.
Operating margins are anticipated to reach around 40% for the quarter, supported by a gross profit margin of 82.6%. S&P Global Ratings revised Synopsys’ outlook to positive from stable, reflecting the debt reduction achieved through the Ansys acquisition. The company’s net leverage target remains below 1x in the coming years.
Synopsys plans to host its first full analyst day in over two years on September 30, where management is expected to outline long-term growth strategies. Janet Lee, General Counsel, will transition to an advisory role by the end of 2026, further aligning the executive team with the company’s evolving priorities.
