After the earnings report, Synopsys' stock price plummets, and Wall Street analysts are rushing to "cut prices and downgrade."

According to Zhitong Finance APP, due to the third quarter performance and guidance falling short of expectations, Synopsys (SNPS.US) stock price plummeted after earnings, and some Wall Street analysts have also downgraded the stock's rating and target price. Baird downgraded Synopsys' rating from "Outperform" to "Neutral," and lowered the target price from $670 to $535. Analysts at Baird, led by Joe Vruwink, stated: "There are high expectations for the fundamentals of Ansys transactions and design automation, but there has been a significant change in the outlook for design intellectual property (IP) (including restrictions on business in China, changes in customer behavior, etc.)." In July of this year, Synopsys completed the acquisition of Ansys for $35 billion. Baird analysts pointed out that after adjusting for intellectual property risk factors, the company's fourth quarter performance guidance is significantly below expectations, and the outlook for the intellectual property business in fiscal year 2026 is also relatively weak. Morgan Stanley maintains an "Overweight" rating on Synopsys, with a target price of $715. The analyst team led by Lee Simpson stated that although the core electronic design automation (EDA) business achieved solid performance in the third quarter, the design intellectual property business was unexpectedly weak. The company claims it is taking steps to address this issue. Analysts added that the revenue guidance for the fourth quarter is above market expectations, but this is because the inclusion of Ansys offsets the weakness in the intellectual property business. Simpson and his team stated: "In addition, after the acquisition of Ansys, Synopsys will also face some challenges in preparing new financial reports. Nevertheless, the potential weakness in earnings indicates that the company's performance is significantly below expectations, which is in stark contrast to its past performance." Needham maintains a "Buy" rating on Synopsys but lowers the target price from $660 to $550. Analysts led by Charles Shi stated: "Following the completion of the acquisition of Ansys in mid-July, Synopsys reported mixed results, with the intellectual property business performing poorly, which has been a significant factor in the volatility of Synopsys' stock price in the past." Analysts pointed out that investors have reason to question whether the intellectual property issues are structural or temporary. Shi and his team stated: "While we are surprised that the two major factors of the China business and Intel continue to impact Synopsys, we believe these headwinds will eventually pass. The transition of the IP business model to 'larger IP' (such as subsystems and chips) and its impact on margins will be our focus." Additionally, Wells Fargo reiterated a "Hold" rating on Synopsys but lowered the target price from $630 to $550. As of Wednesday's close of U.S. stocks, Synopsys fell 35.84%, closing at $387.78