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5 Reasons to Add ANSYS (ANSS) Stock to Your Portfolio Now
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With stellar fourth-quarter 2017 results, strong product portfolio strength and expanding partner base, ANSYS Inc. (ANSS - Free Report) appears a promising pick right now. Moreover, it has been a favorite with investors, courtesy of its rising share price and strong fundamentals.
ANSYS has been witnessing upward estimate revisions, reflecting analysts’ optimism. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 9.9% upward, over the last 30 days. As a result, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ANSYS’s shares have returned 56.1% year over year, substantially outperforming the 36% rally of the industry.
Notably, ANSYS has a number of other aspects that make it an attractive investment option.
5 Reasons Why ANSYS is an Attractive Pick
Upbeat Q4 Results: The company delivered fourth-quarter non-GAAP earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 3 cents. The figure increased 9.2% year over year and was better than management’s guidance of 99 cents to $1.05 per share.
Revenues also increased 12.1% (9.1% in constant currency) from the year-ago quarter to $303.4 million, surpassing the Zacks Consensus Estimate of $291 million and management’s guidance of $284-$293 million. Year-over-year growth was driven by 9.3% increase in software license revenues and 15.2% growth in maintenance and service revenues.
Encouraging Guidance: For first-quarter 2018, ANSYS expects non-GAAP earnings in the range of 90 cents to $1.05 per share. The Zacks Consensus Estimate is pegged at 97 cents. Net revenues are anticipated in the range of $261-$281 million. The Zacks Consensus Estimate is pegged at $273.9 million.
For 2018, ANSYS now projects revenues of $1.152-$1.232 billion and earnings in the range of $4.41-$5.04 per share. The Zacks Consensus Estimate for revenues and earnings are pegged at $1.17 billion and $4.25 per share, respectively.
Stock Looks Undervalued: From a valuation perspective, the stock looks very attractive as it currently trades significantly lower than the industry average based on a forward earnings estimate, which signifies a huge upward potential. ANSYS currently trades at a forward P/E of 35.05x compared with the industry group average of 48.20x.
Positive Earnings Surprise History: ANSYS has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, recording a positive average earnings surprise of 6.47%.
Partnerships and Acquisitions — Key Growth Drivers: Increasing collaborations and acquisitions are driving growth. ANSYS has partnered with major CAD vendors — Autodesk, PTC and Siemens to provide data transfer services as well as build geometry modeling software solutions. The company is also increasing its reach in the cloud computing market on the back of its partnership with Amazon Web Services (“AWS”).
ANSYS collaborations with companies like NVIDIA (NVDA - Free Report) , Ferrari, Taiwan Semiconductor (TSM - Free Report) , Synopsys (SNPS - Free Report) and Grundfos have put forward a varied range of products ranging from automotive reliability solutions, live simulation software, and high performance steering wheels. These collaborations are not only enabling it to bring innovative solutions to the market but are also aiding the company to enhance foothold in the competitive simulations market.
Moreover, the company’s dynamic partner ecosystem, delivering services such as solution, channel and academic partnerships is the primary reason behind its deal wins.
Its aggressive acquisition strategy has played a pivotal part in developing the company’s business in the last few years. With the help of strategic acquisitions such as SpaceClaim Corp, Reaction Design and Evolutionary Engineering, the company is now able to bring innovative products in the fields of 3D modeling, chemistry solutions and cloud computing respectively.
Recently, ANSYS acquired 3DSIM, a leading additive manufacturing simulation technology company. This buyout will help the company to foray into 3D metal printing and access the industry's only complete additive manufacturing simulation workflow.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
5 Reasons to Add ANSYS (ANSS) Stock to Your Portfolio Now
With stellar fourth-quarter 2017 results, strong product portfolio strength and expanding partner base, ANSYS Inc. (ANSS - Free Report) appears a promising pick right now. Moreover, it has been a favorite with investors, courtesy of its rising share price and strong fundamentals.
ANSYS has been witnessing upward estimate revisions, reflecting analysts’ optimism. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 9.9% upward, over the last 30 days. As a result, the stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ANSYS’s shares have returned 56.1% year over year, substantially outperforming the 36% rally of the industry.
Notably, ANSYS has a number of other aspects that make it an attractive investment option.
5 Reasons Why ANSYS is an Attractive Pick
Upbeat Q4 Results: The company delivered fourth-quarter non-GAAP earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 3 cents. The figure increased 9.2% year over year and was better than management’s guidance of 99 cents to $1.05 per share.
Revenues also increased 12.1% (9.1% in constant currency) from the year-ago quarter to $303.4 million, surpassing the Zacks Consensus Estimate of $291 million and management’s guidance of $284-$293 million. Year-over-year growth was driven by 9.3% increase in software license revenues and 15.2% growth in maintenance and service revenues.
Encouraging Guidance: For first-quarter 2018, ANSYS expects non-GAAP earnings in the range of 90 cents to $1.05 per share. The Zacks Consensus Estimate is pegged at 97 cents. Net revenues are anticipated in the range of $261-$281 million. The Zacks Consensus Estimate is pegged at $273.9 million.
For 2018, ANSYS now projects revenues of $1.152-$1.232 billion and earnings in the range of $4.41-$5.04 per share. The Zacks Consensus Estimate for revenues and earnings are pegged at $1.17 billion and $4.25 per share, respectively.
Stock Looks Undervalued: From a valuation perspective, the stock looks very attractive as it currently trades significantly lower than the industry average based on a forward earnings estimate, which signifies a huge upward potential. ANSYS currently trades at a forward P/E of 35.05x compared with the industry group average of 48.20x.
Positive Earnings Surprise History: ANSYS has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, recording a positive average earnings surprise of 6.47%.
Partnerships and Acquisitions — Key Growth Drivers: Increasing collaborations and acquisitions are driving growth. ANSYS has partnered with major CAD vendors — Autodesk, PTC and Siemens to provide data transfer services as well as build geometry modeling software solutions. The company is also increasing its reach in the cloud computing market on the back of its partnership with Amazon Web Services (“AWS”).
ANSYS collaborations with companies like NVIDIA (NVDA - Free Report) , Ferrari, Taiwan Semiconductor (TSM - Free Report) , Synopsys (SNPS - Free Report) and Grundfos have put forward a varied range of products ranging from automotive reliability solutions, live simulation software, and high performance steering wheels. These collaborations are not only enabling it to bring innovative solutions to the market but are also aiding the company to enhance foothold in the competitive simulations market.
Moreover, the company’s dynamic partner ecosystem, delivering services such as solution, channel and academic partnerships is the primary reason behind its deal wins.
Its aggressive acquisition strategy has played a pivotal part in developing the company’s business in the last few years. With the help of strategic acquisitions such as SpaceClaim Corp, Reaction Design and Evolutionary Engineering, the company is now able to bring innovative products in the fields of 3D modeling, chemistry solutions and cloud computing respectively.
Recently, ANSYS acquired 3DSIM, a leading additive manufacturing simulation technology company. This buyout will help the company to foray into 3D metal printing and access the industry's only complete additive manufacturing simulation workflow.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>