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Ansys Inc ANSS

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

Largest Ever New Business Deal Drives Upside for Ansys Despite SMB Slump; Raising FVE to $225

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Ansys experienced a stellar second quarter, with top- and bottom-line results surpassing the high end of the company’s guidance, largely from closing the largest new business deal in its history, thanks to a major high-tech company. While Ansys is still experiencing weakness in its SMB customers, which make up about a third of the company’s revenue base, guidance for the full year has improved, including annual contract value, or ACV, growth. Consequently, we are raising our fair value estimate for the wide-moat simulation standard to $225 per share from $196 per share. Still, we view Ansys shares as largely overvalued at this time, and we suggest waiting for a greater margin of safety before investing in this high-quality name.

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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.

Contact
2600 ANSYS Drive
Canonsburg, PA, 15317
T +1 844 462-6797
Sector Technology
Industry Software - Application
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Aggressive Growth
Employees 4,100

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