ANSYS Inc ANSS is set to report its financial results for the fourth quarter of 2023 on Feb 21st.
The company anticipates non-GAAP earnings per share (EPS) to fall within the range of $3.48-$3.89, a projection made in November 2023. According to the Zacks Consensus Estimate, EPS will stand at $3.70, the figure remaining unchanged over the past 60 days. This suggests a 19.7% increase from the reported figure in the year-ago quarter.
Non-GAAP revenues are expected to be between $769.2 million and $819.2 million, as projected in November 2023. The Zacks Consensus Estimate for revenues is at $791.6 million, indicating a rise of 14% from the year-ago quarter.
The company has recorded an average trailing four-quarter earnings surprise of 11.6%.
Anticipated Performance
ANSS’ fourth-quarter performance is expected to benefit from increased adoption of the company’s simulation solutions across industries such as aerospace and defense (A&D), high-tech, automotive, and ground transportation sectors.
The company is likely to have gained from brisk growth in its high-fidelity simulation solutions, driven by advancements in artificial intelligence and machine learning. In the automotive sector, the rise in demand for electric vehicles and advanced driver assistance systems solutions is expected to have bolstered the to-be-reported quarter’s revenue.
Continued momentum in subscription lease licenses is likely to have supported the revenue performance, attributable to customers shifting from perpetual licenses to subscription leases.
The U.S. Department of Commerce’s new approval processes and export restrictions, including sales to certain Chinese entities, may have resulted in a $20 million headwind to both annualized contract value (ACV) and revenues for the third quarter of 2023. The extended transaction cycles resulting from these new restrictions and processes are expected to have caused delays in closing certain deals in the fourth quarter.
Recent Developments and a Major Merger
Recently, Ansys introduced Fluent Web UI, a web-based technology that allows customers to monitor and control simulations on the cloud or high-performance computing clusters on-premises.
In January 2024, Ansys and Synopsys officially announced their definitive agreement for the latter to acquire ANSS. The deal, valued at approximately $35 billion, is expected to close in the first half of 2025, subject to approval by Ansys shareholders, regulatory approvals, and customary closing conditions. Synopsys intends to finance the $19 billion cash consideration through its available cash and debt financing.
Forecast
Letting out a sigh of relief, the company projects non-GAAP revenues in the range of $2.234-$2.284 billion as compared with the earlier projection of $2.257-$2.327 billion. The company foresees non-GAAP operating margin to range between 41-42%. However, geopolitical instability, forex volatility, and global macroeconomic weakness remain additional headwinds.
Expert Insights
According to our model, ANSYS does not seem poised for an earnings beat this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) augments the likelihood of an earnings beat, but this is not the scenario here. ANSS has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. For investors aiming to discover stocks with promising potential, we recommend using our Earnings ESP Filter.
Stocks Worth Considering
Here are a few stocks that hold promise, as they boast the potential to surpass earnings estimates this quarter:
Codexis, Inc CDXS has an Earnings ESP of +81.25% and a Zacks Rank #2 presently. The Zacks Consensus Estimate for CDXS’ upcoming quarter’s revenues is pegged at $19.31 million, with an estimated loss of 16 cents per share.
Wayfair Inc W has an Earnings ESP of +13.64% and a Zacks Rank #2 currently. The Zacks Consensus Estimate for Wayfair’s upcoming quarter’s revenues is projected at $3.11 billion, along with an estimated loss of 22 cents per share.
Floor & Decor Holdings, Inc FND has an Earnings ESP of +4.87% and holds a Zacks Rank #3 at present. For the upcoming quarter, the Zacks Consensus Estimate for FND’s earnings and revenues is pegged at 27 cents per share and $1.01 billion, respectively. The company’s shares have soared 17.4% in the past year.
Gain insight into forthcoming earnings announcements with the Zacks Earnings Calendar.
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