Ansys Inc (ANSS, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $321.04, Ansys Inc has witnessed a surge of 1.13% over a period, marked against a three-month change of -1.49%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Ansys Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is a breakdown of Ansys Inc's GF Score:
- 1. Financial strength rank: 8/10
- 2. Profitability rank: 10/10
- 3. Growth rank: 10/10
- 4. GF Value rank: 7/10
- 5. Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, and commendable ranks in GF value and momentum, GuruFocus assigned Ansys Inc the GF Score of 99 out of 100, which signals the highest outperformance potential.
Understanding Ansys Inc's Business
Ansys Inc is an engineering software company with a market cap of $27.86 billion. The company provides simulation capabilities for structural, fluids, semiconductor power, embedded software, optical, and electromagnetic properties. With sales amounting to $2.17 billion and an operating margin of 27.93%, Ansys employs over 4,000 people and serves over 50,000 customers globally, including those in aerospace defense and automotive. This robust business model and diverse customer base underscore the company's strong market position.
Financial Strength Breakdown
According to the Financial Strength rating, Ansys Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Ansys Inc stands impressively at 16.2, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 11.6, Ansys Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.4, Ansys Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Ansys Inc's impressive standing among its peers in generating profit. The Piotroski F-Score confirms Ansys Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. Ansys Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Ansys Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 10.2%, which outperforms better than 55.58% of 2393 companies in the Software industry. Moreover, Ansys Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 6.1, and the rate over the past five years is 7.3. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given Ansys Inc's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This analysis underscores the importance of comprehensive financial evaluation in identifying investment opportunities with high growth potential. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
