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Reasons to Retain Aspen (AZPN) Stock in Your Portfolio for Now
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Aspen Technology, Inc (AZPN - Free Report) is benefiting from demand for its diversified product portfolio, especially its asset optimization and management software solutions and Asset Performance Management (APM) suite.
The company’s fiscal 2023 and 2024 revenues are anticipated to rise 65.2% and 8.4%, respectively.
AZPN outpaced estimates in three of the trailing four quarters, delivering an earnings surprise of 6.2%, on average.
In the last reported quarter, Aspen reported non-GAAP earnings of $2.43 per share, beating the Zacks Consensus Estimate by 13%. The company reported non-GAAP earnings of 38 cents per share in the year-ago quarter. Revenues of $238.9 million missed the Zacks Consensus Estimate by 19.7%. The company reported revenues of $77.4 million in the year-ago quarter.
For fiscal 2023, Aspen expects revenues in the range of $1.14-$1.20 billion. Management projects Annual Contract Value (or “ACV”) growth of 10.5%-13.5% year over year. Total bookings are projected at $1.07-$1.17 billion.
AZPN has gained 80% in the past year against an 62.9% decline of the Zacks sub-industry.
Image Source: Zacks Investment Research
Strong Fundamentals
Headquartered in Bedford, MA, Aspen provides asset optimization software solutions. The company's solutions aid in optimizing process manufacturing by supporting real time decision-making, predicting equipment failure and providing the ability to forecast and simulate potential actions.
Aspen Technology is gaining from improving customer demand. The company’s diversified product portfolio, especially its asset optimization and management software solutions and Asset Performance Management suite, is witnessing healthy momentum. The rapid adoption of cloud-based solutions, the proliferation of big data analytics and Internet of Things (IoT) technologies and higher spending on software will likely drive its top line in the long haul. Strategic acquisitions are likely to boost the top line.
The integration of Emerson’s OSI Inc. and Geological Simulation Software (“GSS”) businesses bodes well for Aspen. OSI specializes in optimizing transmission and distribution networks for utility companies in the power industry. The integration of Emerson’s OSI business will aid Aspen to develop its transmission and distribution offering to support power grid modernization and ensure grid reliability.
Aspen will now have the opportunity to cross-sell its current products to industrial customers due to increased exposure to the utilities and power market. Emerson’s GSS business, which will be known as Subsurface Science and Engineering (“SSE”), provides a comprehensive solution for oil and gas supply-chain links. By moving OSI and the GSS business to a subscription-based business model, Aspen is expected to derive considerable revenue and synergy opportunities.
Despite strong demand, the company's near-term prospects might be affected owing to global macroeconomic weakness, inflation, and lingering supply chain troubles. Intensifying competition and adverse currency translations are added concerns for this Zacks Rank #3 (Hold) stock.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have moved up 2% in the past year.
The Zacks Consensus Estimate for Keysight’s fiscal 2022 earnings is pegged at $7.47 per share, up 4.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 11%.
Keysight’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, the average being 9.3%. Shares of KEYS have lost 4.9% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 10.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.8% in the past year.
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Reasons to Retain Aspen (AZPN) Stock in Your Portfolio for Now
Aspen Technology, Inc (AZPN - Free Report) is benefiting from demand for its diversified product portfolio, especially its asset optimization and management software solutions and Asset Performance Management (APM) suite.
The company’s fiscal 2023 and 2024 revenues are anticipated to rise 65.2% and 8.4%, respectively.
AZPN outpaced estimates in three of the trailing four quarters, delivering an earnings surprise of 6.2%, on average.
In the last reported quarter, Aspen reported non-GAAP earnings of $2.43 per share, beating the Zacks Consensus Estimate by 13%. The company reported non-GAAP earnings of 38 cents per share in the year-ago quarter. Revenues of $238.9 million missed the Zacks Consensus Estimate by 19.7%. The company reported revenues of $77.4 million in the year-ago quarter.
For fiscal 2023, Aspen expects revenues in the range of $1.14-$1.20 billion. Management projects Annual Contract Value (or “ACV”) growth of 10.5%-13.5% year over year. Total bookings are projected at $1.07-$1.17 billion.
AZPN has gained 80% in the past year against an 62.9% decline of the Zacks sub-industry.
Image Source: Zacks Investment Research
Strong Fundamentals
Headquartered in Bedford, MA, Aspen provides asset optimization software solutions. The company's solutions aid in optimizing process manufacturing by supporting real time decision-making, predicting equipment failure and providing the ability to forecast and simulate potential actions.
Aspen Technology is gaining from improving customer demand. The company’s diversified product portfolio, especially its asset optimization and management software solutions and Asset Performance Management suite, is witnessing healthy momentum. The rapid adoption of cloud-based solutions, the proliferation of big data analytics and Internet of Things (IoT) technologies and higher spending on software will likely drive its top line in the long haul. Strategic acquisitions are likely to boost the top line.
The integration of Emerson’s OSI Inc. and Geological Simulation Software (“GSS”) businesses bodes well for Aspen. OSI specializes in optimizing transmission and distribution networks for utility companies in the power industry. The integration of Emerson’s OSI business will aid Aspen to develop its transmission and distribution offering to support power grid modernization and ensure grid reliability.
Aspen will now have the opportunity to cross-sell its current products to industrial customers due to increased exposure to the utilities and power market. Emerson’s GSS business, which will be known as Subsurface Science and Engineering (“SSE”), provides a comprehensive solution for oil and gas supply-chain links. By moving OSI and the GSS business to a subscription-based business model, Aspen is expected to derive considerable revenue and synergy opportunities.
Despite strong demand, the company's near-term prospects might be affected owing to global macroeconomic weakness, inflation, and lingering supply chain troubles. Intensifying competition and adverse currency translations are added concerns for this Zacks Rank #3 (Hold) stock.
Stocks to Consider
Some better-ranked stocks from the broader technology space are Cadence Design Systems (CDNS - Free Report) , Keysight Technologies (KEYS - Free Report) and Arista Networks (ANET - Free Report) . All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CDNS 2022 earnings is pegged at $4.11 per share, rising 5.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.7%.
Cadence’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 9.8%. Shares of CDNS have moved up 2% in the past year.
The Zacks Consensus Estimate for Keysight’s fiscal 2022 earnings is pegged at $7.47 per share, up 4.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 11%.
Keysight’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, the average being 9.3%. Shares of KEYS have lost 4.9% of their value in the past year.
The Zacks Consensus Estimate for Arista Network’s 2022 earnings is pegged at $4.04 per share, increasing 10.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
Arista Network’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 30.8% in the past year.