Synopsys is an American electronic design automation company that focuses on silicon design and verification, silicon intellectual property and software security and quality.
💡Credit Suisse, given the potential growth in demand in China and the company's performance, is raising its price target from $ 265 to $ 300.
⚡️Growth Factors:
Synopsys is the largest electronics design CAD company: the most famous product is "Design Compiler", a logic synthesis tool.
One of the company’s growth assumption is that China is a growing market while IC (semiconductor) design activities extend beyond Huawei.
Synopsys posted over 30% business growth in China in FY2020. In fiscal 2021 and 2022, growth is expected to slow to 20%.
Continuous development of the electronics design automation (EDA) area that account for 6% -8% of the compound annual growth rate of semiconductor production.
Potential to gain new customers in the hyperscale computing and automotive industries, together with software and integration consulting division that lay the foundation for future growth.
📖 Financial indicators:
Return vs Market: SNPS exceeded the US Market which returned 31.2% over the past year
Growing Profit Margin: SNPS's current net profit margins (18.9%) are higher than last year (14.3%)
Earnings vs Market: SNPS's earnings (15.1% per year) are forecast to grow slower than the US market (19.5% per year)
Short Term Liabilities: SNPS's short term assets ($2.4B) exceed its short term liabilities ($2.2B)
Long Term Liabilities: SNPS's short term assets ($2.4B) exceed its long term liabilities ($954.6M)
Debt Coverage: SNPS's debt is well covered by operating cash flow (938.8%)
✅ Synopsys #SNPS
🎯 Target price - $ 300, growth potential + 35%.
OTB Global Investments
London, 10 March 2021
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