Valued at more than $60 billion by market cap, Sunnyvale, California-based Synopsys, Inc. (SNPS) delivers trusted and comprehensive silicon-to-systems design solutions, from electronic design automation to silicon IP and system verification and validation.

The tech giant is expected to announce its second-quarter results on Wednesday, May 28. Ahead of the event, analysts expect SNPS to report an adjusted EPS of $2.40, marking a 12.2% increase from $2.14 reported in the year-ago quarter. Moreover, the company has surpassed the Street’s bottom-line estimates in each of the past four quarters.

For the full fiscal 2025, SNPS is expected to report an adjusted EPS of $10.70, up 4.4% from $10.25 reported in fiscal 2024. While in fiscal 2026, its earnings are expected to further surge 19.8% year-over-year to $12.82 per share.

SNPS stock has plunged 18.3% over the past 52 weeks, notably underperforming the S&P 500 Index’s ($SPX) 8.4% gains and the Technology Select Sector SPDR Fund’s (XLK) 4.2% uptick during the same time frame.

Despite delivering better-than-expected financials, Synopsys’ stock prices declined 3.4% in the trading session after the release of its Q1 results on Feb. 26. While the company’s total revenues of $1.46 billion exceeded Street’s expectations, it was down 3.7% compared to the year-ago quarter. Synopsys’ revenues were primarily impacted due to the softness in the macro environment, which led to a 17.2% decline in its Design IP segment’s revenues to $435.1 million.

Meanwhile, the company observed a notable surge in general & admin and other expenses, which led to an even sharper decline in earnings. Its net income for the quarter tanked 34.2% year-over-year to $295.7 million. Furthermore, the company reported a negative $67.5 million cash flow from operations and reduced its full-year GAAP-based earnings guidance, which shattered investor confidence.

Nonetheless, the consensus view on SNPS remains optimistic, with a “Strong Buy” rating overall. Of the 18 analysts covering the stock, opinions include 15 “Strong Buys,” one “Moderate Buy,” and two “Holds.” Its mean price target of $601.44 suggests a 35.5% upside potential from current price levels.