Analyst Note| Julie Bhusal Sharma |
Ansys' third-quarter results were solid--results were within guidance or just surpassing it, as non-GAAP EPS did. Lease license revenue remained strong, and so did renewal rates of maintenance contracts. While profitability continued to suffer amid the pandemic, management remained confident in improving overall outlook for the year. Even after factoring in better expectations for 2020, we are maintaining our fair value estimate for the wide-moat simulation standard at $225 per share. With shares trading at $330 per share, we continue to view Ansys as significantly overvalued even with our assumptions for continued healthy top-line growth and aggressive operating leverage over the next 10 years.