There's been a notable change in appetite for ANSYS, Inc. (NASDAQ:ANSS) shares in the week since its annual report, with the stock down 17% to US$244. ANSYS reported US$1.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$5.25 beat expectations, being 6.0% higher than what analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the latest consensus from ANSYS's eleven analysts is for revenues of US$1.68b in 2020, which would reflect a notable 11% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to reduce 2.5% to US$5.22 in the same period. Before this earnings report, analysts had been forecasting revenues of US$1.67b and earnings per share (EPS) of US$5.31 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Analysts reconfirmed their price target of US$256, showing that the business is executing well and in line with 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. There are some variant perceptions on ANSYS, with the most bullish analyst valuing it at US$323 and the most bearish at US$140 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that analysts are expecting a continuation of ANSYS's historical trends, as next year's forecast 11% revenue growth is roughly in line with 10% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the are forecast to see their revenues grow 12% per year. So although ANSYS is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. The consensus price target held steady at US$256, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple ANSYS analysts - going out to 2024, and you can see them free on our platform here.
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