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ANSYS, AVSimulation Partner to Propel ADAS Design Development

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ANSYS, Inc. (ANSS - Free Report) recently entered into a strategic partnership with AVSimulation with an aim to enhance development of autonomous vehicles (AV). The integration of ANSYS' autonomous driving simulation capabilities with AVSimulation’s expertise simulation technology is expected to accelerate design development process.

The design and testing of high-performance chips for advanced driver assistance systems (ADAS) requires accomplishment of complex security standards which is expensive and time consuming. This is where ANSYS’ VRXPERIENCE which merges virtual reality (VR) capabilities with simulation comes in handy.

Per the terms of the latest deal, VRXPERIENCE will be embedded with AVSimulation's SCANeR Studio technology enabling design developers to simulate numerous driving scenarios. Markedly, the testing is enabled across high performance clusters or public cloud platforms, including Microsoft (MSFT - Free Report) Azure.

The integrated service is already enabling RENAULT’s design developers to accelerate testing and validation of automotive applications. The increasing adoption of ANSYS’ offerings is expected to strengthen the company’s presence in the simulation software market.


Moreover, an expanding customer base is instilling confidence in the stock. Notably, shares of ANSYS have returned 37.4% year to date, significantly outperforming the industry’s rally of 29.1%.

Automotive Initiatives to Enhance Growth Prospects

ANSYS utilizes “high fidelity physics simulation” technology to aid OEMs test end-to-end sensor elements, including electronic, electromagnetic, optical, mechanical, and semiconductor aspects.

This is favoring adoption of the company’s automotive design tools. ANSYS recently announced it is teaming up with BMW Group, which will utilize the company’s simulation tools to design robust AV technologies.

Increasing popularity of ANSYS’ simulation solutions, particularly in the automotive end-market, holds promise. Notably, ADAS market is estimated to hit $91.83 billion by 2025, according to data from MarketAndMarkets.

Moreover, the growing clout of AI, 5G and ADAS chipset making is fueling demand for computational software tools, which favors ANSYS’ prospects. Per Mordor Intelligence data, the simulation software market is forecast to hit $16.69 billion by 2024, compared with $7.16 billion in 2018, at a CAGR of 15.14%.

Further, the company also acquired all assets of DfR Solutions. The acquisition is aimed at providing customers with designer-level toolkit to investigate for electronics failure at the nascent design stage. The buyout is expected to aid ANSYS enhance strength in automotive, avionics and aerospace, and other domains.

We believe that the latest product enhancements with partnerships and strategic acquisitions in growth markets will boost ANSYS’ financial performance in the days ahead.

Zacks Rank & Other Key Picks

ANSYS carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks worth considering in the broader sector are Rosetta Stone Inc. (RST - Free Report) and j2 Global, Inc. (JCOM - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Rosetta Stone and j2 Global is pegged at 12.5% and 8%, respectively.

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