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Aspen Technology (AZPN) Up 1.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Aspen Technology (AZPN - Free Report) . Shares have added about 1.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aspen Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Aspen Lags Q4 Earnings Beat Estimates
Aspen Technology reported fourth-quarter fiscal 2021 non-GAAP earnings of $1.53 per share that beat the Zacks Consensus Estimate by 4.8%. The company reported non-GAAP earnings of $1.49 in the year-ago quarter.
Revenues of $198 million fell short of the Zacks Consensus Estimate by 4%. The company reported revenues of $201.9 million in the year-ago quarter.
The year-over-year decline in top line was owing to constrained customer spending environment stemming from the COVID-19 crisis. In the quarter under review, the company noted that global recovery was not even as end-market demand for fuel and chemicals bounced back to around pre-COVID levels but countries like Australia, India, Singapore and Japan were heavily impacted by spike in infection rates resulting in stringent lockdowns.
In the quarter under review, total bookings were $225.6 million, down 4.5% year over year
Quarter in Detail
License revenues (73.4% of revenues) declined 3% year over year to $145.3 million.
Maintenance revenues (23%) dropped 0.3% year over year to $45.6 million.
Services and other revenues (3.6%) increased 10.4% from the year-ago quarter’s figure to $7 million.
As of Jun 30, 2021, the annual spend (which Aspen Technology defines as the annualized value of all term license and maintenance contracts at the end of the quarter) amounted to $621 million, up 4.8% year over year and 1.9% quarter over quarter.
Margins
Gross profit declined 1.7% year over year to $183.7 million. As a percentage of total revenues, the figure expanded 30 basis points (bps) on a year-over-year basis to 92.8%.
Total operating expenses increased 10.3% from the year-ago quarter’s figure to $77.8 million due to increase in general & administrative expenses, research and development as well as selling and marketing.
Non-GAAP operating income of $118.4 million compared with $125.5 million reported in the prior-year quarter. Non-GAAP operating margin was 59.8% compared with 62.2% operating margin reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents were $379.9 million compared with $317.1 million as of Mar 31, 2021. The company’s total borrowings, net of debt issuance costs, stood at $293.2 million as of Jun 30, 2021.
The company generated $103.2 million cash from operations during the quarter under review compared with $98.7 million in the previous quarter. Non-GAAP free cash flow was $103.7 million in fiscal fourth quarter.
The company resumed buyback activity in fiscal fourth quarter by repurchasing 361,000 shares for $50 million.
Fiscal 2022 View
In the first half of fiscal 2022, management expects to witness persistent constraints in consumer spending. Nevertheless, it expects to benefit from increasing customer spending on improved business outlook in the second half. Management also added that COVID recovery was uneven globally and the emergence of the delta variant strain has made situation very fluid.
For fiscal 2022, Aspen Technology expects revenues in the range of $702-$737 million.
Annual spend growth rate is expected between 5% and 7%, while total bookings are projected in the range of $766-$819 million.
Non-GAAP net income is anticipated in the range of $4.79-$5.17 per share.
Management projects non-GAAP operating income in the range of $361-$391 million. Free cash flow is anticipated between $275 million and $285 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -20% due to these changes.
VGM Scores
Currently, Aspen Technology has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Aspen Technology has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Aspen Technology (AZPN) Up 1.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Aspen Technology (AZPN - Free Report) . Shares have added about 1.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Aspen Technology due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Aspen Lags Q4 Earnings Beat Estimates
Aspen Technology reported fourth-quarter fiscal 2021 non-GAAP earnings of $1.53 per share that beat the Zacks Consensus Estimate by 4.8%. The company reported non-GAAP earnings of $1.49 in the year-ago quarter.
Revenues of $198 million fell short of the Zacks Consensus Estimate by 4%. The company reported revenues of $201.9 million in the year-ago quarter.
The year-over-year decline in top line was owing to constrained customer spending environment stemming from the COVID-19 crisis. In the quarter under review, the company noted that global recovery was not even as end-market demand for fuel and chemicals bounced back to around pre-COVID levels but countries like Australia, India, Singapore and Japan were heavily impacted by spike in infection rates resulting in stringent lockdowns.
In the quarter under review, total bookings were $225.6 million, down 4.5% year over year
Quarter in Detail
License revenues (73.4% of revenues) declined 3% year over year to $145.3 million.
Maintenance revenues (23%) dropped 0.3% year over year to $45.6 million.
Services and other revenues (3.6%) increased 10.4% from the year-ago quarter’s figure to $7 million.
As of Jun 30, 2021, the annual spend (which Aspen Technology defines as the annualized value of all term license and maintenance contracts at the end of the quarter) amounted to $621 million, up 4.8% year over year and 1.9% quarter over quarter.
Margins
Gross profit declined 1.7% year over year to $183.7 million. As a percentage of total revenues, the figure expanded 30 basis points (bps) on a year-over-year basis to 92.8%.
Total operating expenses increased 10.3% from the year-ago quarter’s figure to $77.8 million due to increase in general & administrative expenses, research and development as well as selling and marketing.
Non-GAAP operating income of $118.4 million compared with $125.5 million reported in the prior-year quarter. Non-GAAP operating margin was 59.8% compared with 62.2% operating margin reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents were $379.9 million compared with $317.1 million as of Mar 31, 2021. The company’s total borrowings, net of debt issuance costs, stood at $293.2 million as of Jun 30, 2021.
The company generated $103.2 million cash from operations during the quarter under review compared with $98.7 million in the previous quarter. Non-GAAP free cash flow was $103.7 million in fiscal fourth quarter.
The company resumed buyback activity in fiscal fourth quarter by repurchasing 361,000 shares for $50 million.
Fiscal 2022 View
In the first half of fiscal 2022, management expects to witness persistent constraints in consumer spending. Nevertheless, it expects to benefit from increasing customer spending on improved business outlook in the second half. Management also added that COVID recovery was uneven globally and the emergence of the delta variant strain has made situation very fluid.
For fiscal 2022, Aspen Technology expects revenues in the range of $702-$737 million.
Annual spend growth rate is expected between 5% and 7%, while total bookings are projected in the range of $766-$819 million.
Non-GAAP net income is anticipated in the range of $4.79-$5.17 per share.
Management projects non-GAAP operating income in the range of $361-$391 million. Free cash flow is anticipated between $275 million and $285 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -20% due to these changes.
VGM Scores
Currently, Aspen Technology has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Aspen Technology has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.