ANSYS, Inc. Shows Strong Earnings Amidst Market Challenges
Market Cap of $30.4 billion: ANSYS, Inc. (ANSS) Keeps Innovating in Engineering Simulation
ANSYS, Inc., based in Canonsburg, Pennsylvania, is a prominent player in engineering simulation software and services. Valued at a market capitalization of $30.4 billion, it serves a broad audience, including industries, academic institutions, and research entities. The company’s extensive product offerings allow users to conduct simulations in structural, fluids, electronics, and multiphysics domains, facilitating forward-thinking design and optimization.
Despite its solid position in the market, ANSS shares have lagged behind the broader market in the past 52 weeks. Specifically, ANSS has increased by 17.1%, while the S&P 500 Index ($SPX) saw a stronger uptick of 31.8%. In 2024, ANSS’s shares experienced a decline of 4.1%, contrasting with the S&P’s significant 25.8% rise year-to-date.
Looking at a more targeted comparison, ANSYS has also underperformed against the Technology Select Sector SPDR Fund’s (XLK) return of 25.6% over the same period, as well as a 20.3% year-to-date increase.
However, ANSS shares surged by 6.6% following the company’s Q3 earnings announcement on November 6. The numbers exceeded expectations, with earnings per share (EPS) of $2.58 and revenue of $601.9 million. This impressive performance marked a 31.2% increase in revenue year-over-year, attributed to strong multi-year lease results and a notable contract worth $88 million in the Americas. Additionally, a non-GAAP operating margin of 45.8% reflected efficient cost control and solid profitability.
For the ongoing fiscal year ending in December, analysts project that ANSS’s EPS will increase by 13.5% year-over-year, reaching $7.66. The company’s ability to meet earnings predictions has been somewhat mixed; it exceeded estimates in three of the last four quarters but fell short on one occasion.
Among the twelve analysts evaluating ANSS, the overall consensus rating is a “Hold,” indicated by two “Strong Buy” ratings, nine “Holds,” and one “Strong Sell.”
On November 7, Baird elevated ANSYS’ price target to $365 while maintaining an “Outperform” rating, spotlighting the company’s performance aligned with growth expectations for FY24.
At the time of writing, ANSS shares are trading below the average price target of $352.89, with the highest price target on the Street set at $375, suggesting a potential upside of just 7.8% from the current levels.
On the date of publication, Sohini Mondal did not have positions, either directly or indirectly, in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
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