Shareholders of ANSYS, Inc. (NASDAQ:ANSS) will be pleased this week, given that the stock price is up 11% to US$337 following its latest quarterly results. ANSYS reported US$369m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.87 beat expectations, being 7.7% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the eleven analysts covering ANSYS are now predicting revenues of US$1.82b in 2021. If met, this would reflect a notable 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to ascend 17% to US$5.23. Before this earnings report, the analysts had been forecasting revenues of US$1.79b and earnings per share (EPS) of US$5.22 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 6.5% to US$338. It looks as though they previously had some doubts over whether the business would live up to their expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic ANSYS analyst has a price target of US$380 per share, while the most pessimistic values it at US$266. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that ANSYS' rate of growth is expected to accelerate meaningfully, with the forecast 18% revenue growth noticeably faster than its historical growth of 12%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that ANSYS is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on ANSYS. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for ANSYS going out to 2022, and you can see them free on our platform here..
Even so, be aware that ANSYS is showing 1 warning sign in our investment analysis , you should know about...
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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