Synopsys: Needham Downgrades to Buy, PT Lowered to $550 from $660.

Synopsys: Needham Downgrades to Buy, PT Lowered to $550 from $660.

Synopsys, Inc. (NASDAQ: SNPS) faced a significant downgrade in its stock outlook on September 9, 2025, as Needham Research & Management downgraded the stock from Overweight to Buy, reducing the price target from $660 to $550. This move comes amid mixed third-quarter results and ongoing integration challenges from the acquisition of Ansys.

Synopsys reported a third-quarter revenue of $1.74 billion, up 14% year-over-year (YoY), but this figure fell short of the expected $1.77 billion. Non-GAAP earnings per diluted share (EPS) came in at $3.39, missing the expected $3.75. The company attributed the underperformance to the integration of Ansys and external challenges, including geopolitical tensions and export control restrictions Synopsys Posts Financial Results for Third Quarter Fiscal Year 2025^[3].

The downgrade follows a series of recent changes in analyst ratings and price targets. Stifel recently raised its price target to $650 from $550, citing the merger's potential to become accretive sooner than anticipated. KeyBanc and Piper Sandler also increased their price targets to $660, while Goldman Sachs reiterated its Buy rating with a $700 target Synopsys price target raised to $650 from $550 at Stifel on Ansys acquisition^[2].

Despite the downgrade, Synopsys remains optimistic about its long-term growth prospects. The company expects full-year 2025 revenue between $7.03 and $7.06 billion, with non-GAAP EPS ranging from $12.76 to $12.80. The integration of Ansys is expected to bring significant synergies, with the combined entity targeting a $31 billion total addressable market Synopsys Non-GAAP EPS of $3.39 misses by $0.36, revenue of $1.74B misses by $30M^[1].

The downgrade by Needham Research & Management highlights the ongoing challenges faced by Synopsys in integrating Ansys and navigating external headwinds. However, the company's strong financial health and diversified geographic exposure continue to support its long-term growth prospects. Investors should closely monitor the upcoming earnings call and the progress of the Ansys integration to gauge the company's future performance.