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Aspen Technology Inc AZPN

Morningstar Rating
$195.46 +1.25 (0.64%)
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Company Report

AspenTech Earnings: Despite a Light Result, We Remain Confident in Long-Term Demand

Wide-moat AspenTech reported fiscal first-quarter results that were below our revenue and profitability estimates. While results in the quarter were light due to seasonal weakness beyond our expectations, management reiterated its fiscal 2024 targets. The firm also announced it is entering an expansion phase following the integration of its three businesses, aiming to capture demand opportunities as capital expenditure budgets improve. In our view, the firm is well-positioned to capitalize on secular trends and will benefit from capital-intensive industries facing the challenge of meeting increasing resource demand in a durable way. After considering results and guidance, we maintain our $195 per share fair value estimate. With shares down around 2% after hours, we view the stock as slightly undervalued.

Price vs Fair Value

AZPN is trading at a 0% premium.
Price
$195.47
Fair Value
$983.00
Uncertainty
High
1-Star Price
$918.79
5-Star Price
$661.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

AspenTech is a longtime leader in the process control industry for continuous process-driven high-capital-intensity businesses, typically involving oil refining and chemical processing.

Bears

Approximately 90% of current revenue is derived from the oil and gas, energy, and chemical processing industries, which are volatile in nature.

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News

Trading Information

Previous Close Price
$194.21
Day Range
$193.45196.98
52-Week Range
$161.32247.96
Bid/Ask
$78.57 / $310.78
Market Cap
$12.45 Bil
Volume/Avg
141,540 / 192,410

Key Statistics

Price/Earnings (Normalized)
41.59
Price/Sales
12.11
Dividend Yield
Dividend Yield (Forward)
Total Yield
1.47%

Company Profile

Aspen Technology is a global leader in asset optimization software, enabling customers within capital-intensive industries to design, operate and maintain their functions to meet their profitability, safety, and sustainability goals. The heritage business of AspenTech was founded in 1981 and provides software solutions purposed to optimize engineering, manufacturing, and supply chain and asset management functions. In 2021, Emerson Electric traded over $6 billion in cash and its Open Systems International (digital grid management) and subsurface science and engineering businesses for 55% of AspenTech’s shares. The new AspenTech is the combination of heritage Aspen, OSI, and SSE and serves more than 3,000 customers across 40 countries.
Sector
Technology
Industry
Software - Application
Stock Style Box
Mid Growth
Total Number of Employees
3,900

Competitors

Valuation

Metric
AZPN
HON
EMR
Price/Earnings (Normalized)
41.5921.4319.94
Price/Book Value
0.977.572.45
Price/Sales
12.113.653.38
Price/Cash Flow
39.9731.0517.56
Price/Earnings
AZPN
HON
EMR

Financial Strength

Metric
AZPN
HON
EMR
Quick Ratio
2.110.922.10
Current Ratio
2.261.352.75
Interest Coverage
10.2510.42
Quick Ratio
AZPN
HON
EMR

Profitability

Metric
AZPN
HON
EMR
Return on Assets (Normalized)
2.08%9.55%6.91%
Return on Equity (Normalized)
2.33%34.05%18.30%
Return on Invested Capital (Normalized)
2.06%16.47%8.82%
Return on Assets
AZPN
HON
EMR

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