Synopsys Replenishes Share Buyback up to $500M; Shares Rise

Synopsys, Inc. (SNPS) announced that its Board has agreed to replenish the existing share buyback program authorization to up to $500 million. Shares rose 1.4% to close at $265.14 on June 17.

Synopsys is a software company that develops electronic products and software applications in the electronic design automation (EDA) industry. (See Synopsys stock chart on TipRanks)

Trac Pham, the company’s CFO said, “We continue to execute well on our strategy to balance strategic investments to grow the business, expand margins and return capital to stockholders.”

Started in 2002 with the Board’s approval, the share buyback program has been replenished from time to time as funds are used up, though the company is not obligated to buy back any specific amount of shares. The program may be terminated or suspended at any time by the company’s CFO or at the Board’s discretion.

After a recent interview with the company’s top brass, Robert W. Baird analyst Joseph Vruwink maintained a Buy rating on the stock with a price target of $320, implying 20.7% upside potential to current levels.

Vruwink said, “The primary customers of Synopsys EDA software are semiconductor companies, for which the drive to innovate – more performance in smaller packages using less power – has necessitated consistent investment in R&D efforts… As the leader in digital design and verification, Synopsys benefits from these development activities.”

With 4 unanimous Buys, the stock has a Strong Buy consensus rating. The SNPS average analyst price target of $318.33 implies 20.1% upside potential to current levels. Shares have gained 39.6% over the past year.

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