Needham & Company Starts ANSYS (ANSS) at Hold
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Needham & Company initiates coverage on ANSYS (NASDAQ: ANSS) with a Hold rating.
Analyst Richard Valera commented, "ANSYS is the leading player in the ~$5B Simulation & Analysis software market, with an impressive operating history. However, revenue growth has slowed recently due to macro headwinds, most notably in the semi and energy end markets, and from a gradual transition to a more ratable license model. As the company sees easier comps in the semi and energy markets, we see its bookings growth likely moving back toward the high-single digit level implied in the company's C'17 guidance. That said, with high-40% op margins that leave little room for expansion, we see current valuation--at ~7x EV/C2017 sales and ~22x C'17 ex-cash NG EPS--as likely already anticipating this improved performance. We initiate with a Hold rating and would look for evidence of upside to our estimates or a pullback in the shares to become more positive."
Shares of ANSYS closed at $93.77 yesterday.
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