ANSYS Faces Mixed Signals Ahead of Q3 Earnings Announcement
Canonsburg, Pennsylvania-based ANSYS, Inc. (ANSS) specializes in engineering simulation software and services. With a market capitalization of $28.1 billion, its operations extend across the Americas, Indo-Pacific, Europe, the Middle East, and Africa. Investors are keenly awaiting its Q3 earnings report, which will be released after market hours on Wednesday, Nov. 6.
Anticipated Earnings Growth
Market analysts predict that ANSYS will announce a profit of $1.15 per share, reflecting an increase of 29.2% from $0.89 reported in the same quarter last year. Over the past year, the company has outperformed Wall Street’s adjusted earnings per share (EPS) expectations in three of four quarters, while meeting them only once. In its most recent quarter, ANSYS reported an impressive adjusted EPS of $1.89, a remarkable year-over-year increase of 78.3%, outpacing estimates by 33.1%.
Future Projections
Looking ahead, analysts forecast an adjusted EPS of $7.32 for fiscal 2024, marking an 8.4% growth from $6.75 in fiscal 2023. For fiscal 2025, the anticipated adjusted EPS is $8.13, suggesting an 11.1% increase year-over-year.
Stock Performance in Context
So far this year, ANSS stock has dropped by 11.3%, lagging behind the S&P 500 Index’s gains of 21.5% and the Technology Select Sector SPDR Fund’s returns of 18.7% during the same period. The challenges began earlier in the year when stock prices fell by 5.5% following the announcement of its acquisition by Synopsys, Inc. (SNPS) on Jan. 16, and the stock has had difficulty recovering ever since.
Mixed Reactions from Analysts
Despite reporting higher revenues and net income, ANSYS stock fell by 1.2% the day after its Q2 earnings report was released on July 31. The company achieved a significant revenue increase of 19.6% year-over-year, totaling $594.1 million and surpassing expectations. Furthermore, its net income surged by 87%, reaching $130 million compared to the same quarter last year. However, the suspension of quarterly earnings calls and a lack of management guidance have left investors uncertain about the company’s future.
Currently, the consensus rating on ANSS stock is neutral, with an overall “Hold” recommendation. Of the 12 analysts monitoring the stock, two endorse a “Strong Buy,” nine recommend a “Hold,” and one indicates a “Strong Sell.” The average price target for the stock is $348.78, representing a potential upside of 8.4% from current levels.
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On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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