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In September 2018, ANSYS, Inc. (NASDAQ:ANSS) announced its earnings update. Overall, the consensus outlook from analysts appear fairly confident, with profits predicted to increase by 21% next year relative to the past 5-year average growth rate of 4.0%. With trailing-twelve-month net income at current levels of US$259m, we should see this rise to US$313m in 2020. Below is a brief commentary around ANSYS’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will ANSYS perform in the near future?
Over the next three years, it seems the consensus view of the 16 analysts covering ANSS is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To understand the overall trajectory of ANSS’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
This results in an annual growth rate of 8.9% based on the most recent earnings level of US$259m to the final forecast of US$378m by 2022. EPS reaches $5.1 in the final year of forecast compared to the current $3.05 EPS today. Analysts are predicting earnings growth to outpace revenue by the end of 2022, resulting in a margin expansion from 24% to 25%.
Future outlook is only one aspect when you’re building an investment case for a stock. For ANSYS, I’ve put together three pertinent factors you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is ANSYS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ANSYS is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of ANSYS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.