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Ansys Inc ANSS

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Ansys' SMB Group Aids in Q1 Beat; Raising FVE to $237, but Shares Still Overvalued

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Wide-moat Ansys’ first quarter was a standout, exceeding management’s guidance on all counts, including annual contract value, due largely to unforeseen strength in small and medium business customers. Increased confidence in the SMB recovery led Ansys to up its guidance for the remainder of the year. With our own incremental confidence in Ansys’ SMB revenue and long-term trajectory, we think the company can reach the high end of its top- and bottom-line guidance for the year. Consequently, we are raising our fair value estimate for the application software powerhouse to $237 per share from $230. Although the shares were down 6% after the results in what we see as a slight correction, we believe they are still significantly overvalued as we suspect the market is factoring in a premium for Ansys’ high-quality, moaty nature.

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Company Profile

Business Description

Ansys is an engineering software company that provides simulation capabilities for structural, fluids, semiconductor power, embedded software, optical, and electromagnetic properties. Ansys employs over 4,000 people and serves over 50,000 customers globally, including those in aerospace defense and automotive.

2600 ANSYS Drive
Canonsburg, PA, 15317
T +1 844 462-6797
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 4,800