Synopsys is set to report some earnings tomorrow. Share price currently sat around $329.14, key resistance sits at $340.69 with key support at $320.08.

Overview

The American corporation Synopsys specialises in software security and quality, silicon design and verification, and silicon intellectual property. Application security testing is now a part of the range of products and services offered by Synopsys. The company’s headquarters are based in Mountain View, California.

Financials

Looking at the financial year ending on the 31^st of October 2021 versus 2020, the revenue rose to $4.2bn from $3.7bn and gross profit rose to $3.3bn from $2.9bn. Additionally, EBITDA increased by $110m and net income after taxes and expenses totalled $756m, up $93m from the previous year. As a result of the above, the EPS rose by $0.56 to $4.96 a share. Furthermore, total assets saw a rise of $722m whereas liabilities only rose $336m for the year and its cash-on-hand pile grew to $1.6bn from $1.2bn. This allowed the equity of the company to come in at $5.3bn, an almost $400m increase year-on-year.  

Technicals

From a technical overview, the share price is currently sitting around $329.14 a share. Towards the upside, minor resistance sits at $334.39 then at $336.19 then a key level at $340.69 (corresponding with the upper green trendline). A break above the key resistance level could see the stock climb towards the $350-$360 price range. Towards the downside, minor support sits at $327.21 then at $325.23 then a major point at $320.08. A break below the major support may see the stock’s price plummet towards the $280-$290 price range, although this is more likely in the mid-term. Looking at the indicators, MACD is currently positive and so is RSI as it reads 60. However, important to note that both are starting to falter slightly and if both continue to do so, then could head towards a neutral stance.

Summary

The overall view on the financials of the company is that they are in an uptrend, indicating steady growth year-on-year. The company has not acquired any major long-term debts in 2021, cash on hand continues strongly, and Synopsys looks like it will continue this progress over the next couple years at least. Looking at the technicals, the stock has been in a sharp uptrend since the 4^th of November this year, both indicators are positive suggesting that there is potential for more upside. However, they are slightly faltering but still remain positive so just worth for investors to keep an eye on. Additionally, the company is set to report some earnings tomorrow where a positive report could boost its stock to break that key resistance level, however, a negative report may send it back towards its lows as highlighted in the technical analysis above.