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Shareholders Are Thrilled That The ANSYS (NASDAQ:ANSS) Share Price Increased 224%

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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. One great example is ANSYS, Inc. (NASDAQ:ANSS) which saw its share price drive 224% higher over five years. It's also good to see the share price up 18% over the last quarter. But this could be related to the strong market, which is up 19% in the last three months.

See our latest analysis for ANSYS

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, ANSYS managed to grow its earnings per share at 12% a year. This EPS growth is lower than the 27% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth. This optimism is visible in its fairly high P/E ratio of 62.19.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).


Dive deeper into ANSYS' key metrics by checking this interactive graph of ANSYS's earnings, revenue and cash flow.

A Different Perspective

It's good to see that ANSYS has rewarded shareholders with a total shareholder return of 43% in the last twelve months. That gain is better than the annual TSR over five years, which is 27%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.