ANSYS (ANSS, Financial) is the leader in the simulation industry that its clients use for new product development. New technologies are creating goods and services that are significantly more complex. These companies need ANSYS’s software for product testing that they cannot do themselves. Accordingly, ANSYS generates strong recurring revenue through contracts that last three to five years and retention rates at 95% or higher. ANSYS has a $20 billion addressable market that is underpenetrated today. ANSYS’ stock declined 40% last year. We also believe its current valuation and growth prospects are attractive.
From Ron Baron (Trades, Portfolio)'s Baron Focused Fund fourth-quarter 2022 letter.
