/Ansys%20Inc_%20logo%20on%20phone%20and%20website-by%20T_Schneider%20via%20Shutterstock.jpg)
Valued at a market cap of $30.4 billion, ANSYS, Inc. (ANSS) is a global leader in engineering simulation software and services, catering to industries, academia, and research institutions. Its comprehensive product suite includes solutions for structural, fluids, electronics, and multiphysics simulations, enabling innovative design and optimization across diverse fields.
Shares of the Canonsburg, Pennsylvania-based company have underperformed the broader market over the past 52 weeks. ANSS has risen 17.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31.8%. In 2024, shares of ANSS are down 4.1%, compared to SPX’s 25.8% gain on a YTD basis.
Focusing more closely, the engineering-simulation software maker has also lagged behind the Technology Select Sector SPDR Fund’s (XLK) 25.6% return over the past 52 weeks and 20.3% return on a YTD basis.
Shares of ANSS climbed 6.6% following its Q3 earnings release on Nov. 6 due to a strong earnings and revenue beat, with EPS of $2.58 and revenue of $601.9 million, both exceeding estimates. The impressive 31.2% year-over-year revenue growth, driven by robust multi-year lease performance and a significant $88 million high-tech contract in the Americas, boosted investor confidence. Additionally, the non-GAAP operating margin surged to 45.8%, reflecting effective cost management and solid profitability.
For the current fiscal year, ending in December, analysts expect ANSS’ EPS to grow 13.5% year-over-year to $7.66. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters while missing on another occasion.
Among the 12 analysts covering the stock, the consensus rating is a “Hold.” That’s based on two “Strong Buy” ratings, nine “Holds,” and one “Strong Sell.”
On Nov. 7, Baird raised ANSYS' price target to $365 and maintained an “Outperform" rating, citing solid performance aligned with FY24 growth expectations.
As of writing, ANSS is trading below the mean price target of $352.89. The Street-high price target of $375, implies a potential upside of just 7.8% from the current price levels.
