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NEW YORK (TheStreet) -- Shares of Synopsys (SNPS) - Get Synopsys, Inc. Report closed trading down ahead of the release of the company's fourth quarter earnings results on Wednesday.

The Mountain View, CA-based technology solutions provider is expected to report fourth quarter earnings of 66 cents per share on revenue of $577.13 million. 

Those totals are ahead of the 64 cents per share and $539 million the company reported earnings in the year ago period.

In the previous quarter, the company earned 63 cents per share on revenue of $555.8 million. 

Synopsys closed trading down 0.77% to $50.08 today.

TheStreet Recommends

TheStreet Ratings team rates SYNOPSYS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate SYNOPSYS INC (SNPS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and expanding profit margins. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 15.8%. Since the same quarter one year prior, revenues slightly increased by 6.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • SNPS's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • SYNOPSYS INC's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SYNOPSYS INC increased its bottom line by earning $1.64 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $1.64).
  • You can view the full analysis from the report here: SNPS

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.