Synopsys, Inc. Increases Stock Repurchase Program to $1.5B

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The board of directors for Synopsys,($NASDAQ:SNPS) Inc has unanimously approved an increase to the size of the company’s stock repurchase program. Under the new program, Synopsys may purchase up to $1.5 billion of its own outstanding shares on the open market. The software company also said it is not obligated to acquire any particular amount of shares, and the program may be suspended or terminated at any time. Do you think this will affect Synopsys’ market and earnings in the long term? Some analysts believe that the stock repurchase program is a positive move for the company, and that it could help Synopsys’ share price to rebound after a recent slump. Others are concerned that the buyback could put pressure on earnings per share in the short term, but believe that it could be a good long-term investment for the company.

Market Price

This news sent the stock prices soaring, with the stock opening at $341.3 and closing at $332.5. Synopsys is a leading provider of software and IP for semiconductor design and manufacturing.

VI Analysis

A company’s fundamentals are a reflection of its long-term potential. The following analysis on Synopsys, Inc is made simple by VI app. The VI Star Chart shows that Synopsys, Inc is strong in growth, profitability, and medium in asset and weak in dividend. Synopsys, Inc has a high health score of 8/10 considering its cashflows and debt, is capable to sustain future operations in times of crisis. Synopsys, Inc is classified as a ‘gorilla’, a type of company that achieved stable and high revenue or earning growth due to its strong competitive advantage. High growth companies are deemed more risky as they attempt to grow faster.

Summary

Synopsys, Inc today announced that its Board of Directors has authorized an increase to its stock repurchase program of $1.5 billion. Synopsys believes that its common stock is an attractive investment and repurchasing shares opportunistically supports its goal of delivering shareholder value. The actual number of shares repurchased and the timing of repurchases will depend on a variety of factors, including market conditions, stock price, and available cash. Synopsys intends to fund the repurchases under its existing cash on hand and cash flow from operations. This announcement comes after the stock price moved down the same day.