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Why Is Ansys (ANSS) Up 6.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Ansys (ANSS - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ansys 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 drivers.
ANSYS Q4 Earnings Beat Estimates, Revenues Up Y/Y
ANSYS reported fourth-quarter 2022 earnings of $3.09 per share, beating the Zacks Consensus Estimate by 10.8%. The bottom line increased 10% year over year.
Non-GAAP revenues of $694.7 million surpassed the Zacks Consensus Estimate by 7.5%. The top line increased 5% (up 10.2% at constant currency or cc) from the year-ago quarter.
The company’s solutions continue to witness strong demand in high-tech, aerospace and automotive, along with strong growth across all regions. Deferred revenues and backlogs were $1.417 billion, up 12.6% year over year.
Quarter in Detail
Subscription lease revenues (46.7% of non-GAAP revenues) increased 11.6% at cc to $324.7 million. Perpetual licenses’ revenues (12.8%) decreased 2.4% year over year at cc to $89 million.
Maintenance revenues (37.8%) increased 13.3% at cc to $262.3 million. Service revenues (2.7%) were up 12.7% year over year to $18.9 million.
Direct and indirect channels contributed 80.7% and 19.3%, respectively, to non-GAAP revenues.
Annual contract value or ACV increased 8% year over year (up 13% at cc) to $818 million.
On a geographic basis, non-GAAP revenues from the Americas, EMEA (comprising Germany, the U.K. and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 51.7%, 28.8% and 19.5% to non-GAAP revenues, respectively.
Non-GAAP revenues from the Americas were up 16.4% to $359.2 million at cc. Revenues from EMEA increased 3.4% to $199.8 million at cc. Revenues from the Asia-Pacific increased 6.9% to $135.7 million at cc.
Operating Details
The non-GAAP gross margin expanded 170 basis points (bps) on a year-over-year basis to 94%.
Total operating expenses increased 7.1% year over year to $372.6 million due to higher research and development, and selling, general and administrative expenses.
The non-GAAP operating margin expanded 120 bps on a year-over-year basis to 48%.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and short-term investments amounted to $614.6 million compared with $668.1 million as of Dec 31, 2021.
As of Dec 31, 2022, the company’s long-term debt was $753.6 million compared with $753.6 million as of Dec 31, 2021.
In the quarter under review, cash from operations increased 71% year over year to $174 million.
In the quarter under review, the company repurchased 225,437 shares for $50 million. In 2022, the company repurchased 725,437 shares for $205.6 million. As of Dec 31, 2022, it had 1.7 million shares remaining under the share buyback program.
Guidance
For first-quarter 2023, ANSYS expects non-GAAP earnings of $1.53 - $1.71 per share.
Non-GAAP revenues are anticipated to be between $482.5 million and $507.5 million. Management projects a non-GAAP operating margin of 35.3-37.3%.
For 2023, ANSYS expects non-GAAP revenues of $2,242 - $2,322 million. Management expects a non-GAAP operating margin of 41-42% for 2023.
Non-GAAP earnings are envisioned to be in the range of $8.34-$8.86 per share.
ACV is anticipated to be between $2,265 million and $2,335 million while operating cash flow is projected between $673 million and $723 million for 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.64% due to these changes.
VGM Scores
At this time, Ansys has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ansys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ansys is part of the Zacks Computer - Software industry. Over the past month, Cadence Design Systems (CDNS - Free Report) , a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended December 2022 more than a month ago.
Cadence reported revenues of $899.88 million in the last reported quarter, representing a year-over-year change of +16.4%. EPS of $0.96 for the same period compares with $0.82 a year ago.
Cadence is expected to post earnings of $1.25 per share for the current quarter, representing a year-over-year change of +6.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cadence. Also, the stock has a VGM Score of D.
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Why Is Ansys (ANSS) Up 6.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Ansys (ANSS - Free Report) . Shares have added about 6.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ansys 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 drivers.
ANSYS Q4 Earnings Beat Estimates, Revenues Up Y/Y
ANSYS reported fourth-quarter 2022 earnings of $3.09 per share, beating the Zacks Consensus Estimate by 10.8%. The bottom line increased 10% year over year.
Non-GAAP revenues of $694.7 million surpassed the Zacks Consensus Estimate by 7.5%. The top line increased 5% (up 10.2% at constant currency or cc) from the year-ago quarter.
The company’s solutions continue to witness strong demand in high-tech, aerospace and automotive, along with strong growth across all regions. Deferred revenues and backlogs were $1.417 billion, up 12.6% year over year.
Quarter in Detail
Subscription lease revenues (46.7% of non-GAAP revenues) increased 11.6% at cc to $324.7 million. Perpetual licenses’ revenues (12.8%) decreased 2.4% year over year at cc to $89 million.
Maintenance revenues (37.8%) increased 13.3% at cc to $262.3 million. Service revenues (2.7%) were up 12.7% year over year to $18.9 million.
Direct and indirect channels contributed 80.7% and 19.3%, respectively, to non-GAAP revenues.
Annual contract value or ACV increased 8% year over year (up 13% at cc) to $818 million.
On a geographic basis, non-GAAP revenues from the Americas, EMEA (comprising Germany, the U.K. and other EMEA) and the Asia-Pacific (Japan and Other Asia-Pacific) contributed 51.7%, 28.8% and 19.5% to non-GAAP revenues, respectively.
Non-GAAP revenues from the Americas were up 16.4% to $359.2 million at cc. Revenues from EMEA increased 3.4% to $199.8 million at cc. Revenues from the Asia-Pacific increased 6.9% to $135.7 million at cc.
Operating Details
The non-GAAP gross margin expanded 170 basis points (bps) on a year-over-year basis to 94%.
Total operating expenses increased 7.1% year over year to $372.6 million due to higher research and development, and selling, general and administrative expenses.
The non-GAAP operating margin expanded 120 bps on a year-over-year basis to 48%.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash and short-term investments amounted to $614.6 million compared with $668.1 million as of Dec 31, 2021.
As of Dec 31, 2022, the company’s long-term debt was $753.6 million compared with $753.6 million as of Dec 31, 2021.
In the quarter under review, cash from operations increased 71% year over year to $174 million.
In the quarter under review, the company repurchased 225,437 shares for $50 million. In 2022, the company repurchased 725,437 shares for $205.6 million. As of Dec 31, 2022, it had 1.7 million shares remaining under the share buyback program.
Guidance
For first-quarter 2023, ANSYS expects non-GAAP earnings of $1.53 - $1.71 per share.
Non-GAAP revenues are anticipated to be between $482.5 million and $507.5 million. Management projects a non-GAAP operating margin of 35.3-37.3%.
For 2023, ANSYS expects non-GAAP revenues of $2,242 - $2,322 million. Management expects a non-GAAP operating margin of 41-42% for 2023.
Non-GAAP earnings are envisioned to be in the range of $8.34-$8.86 per share.
ACV is anticipated to be between $2,265 million and $2,335 million while operating cash flow is projected between $673 million and $723 million for 2023.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.64% due to these changes.
VGM Scores
At this time, Ansys has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, 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
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ansys has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ansys is part of the Zacks Computer - Software industry. Over the past month, Cadence Design Systems (CDNS - Free Report) , a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended December 2022 more than a month ago.
Cadence reported revenues of $899.88 million in the last reported quarter, representing a year-over-year change of +16.4%. EPS of $0.96 for the same period compares with $0.82 a year ago.
Cadence is expected to post earnings of $1.25 per share for the current quarter, representing a year-over-year change of +6.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cadence. Also, the stock has a VGM Score of D.