Analyzing Ansys In Comparison To Competitors In Software Industry

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Ansys ANSS vis-à-vis its key competitors in the Software industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in the industry.

Ansys Background

Ansys is an engineering software company that provides simulation capabilities for structural, fluids, semiconductor power, embedded software, optical, and electromagnetic properties. Ansys employs over 4,000 people and serves over 50,000 customers globally, including those in aerospace defense and automotive.

When analyzing Ansys, the following trends become evident:

• The stock's Price to Earnings ratio of 52.71 is lower than the industry average by 0.55x, suggesting potential value in the eyes of market participants.

• With a Price to Book ratio of 5.06, significantly falling below the industry average by 0.35x, it suggests undervaluation and the possibility of untapped growth prospects.

• The Price to Sales ratio of 11.8, which is 1.11x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• With a Return on Equity (ROE) of 1.12% that is 5.25% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

• With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $110 Million, which is 0.19x below the industry average, the company may face lower profitability or financial challenges.

• The gross profit of $390 Million is 0.25x below that of its industry, suggesting potential lower revenue after accounting for production costs.

• With a revenue growth of -2.9%, which is much lower than the industry average of 13.42%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When comparing Ansys with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• In terms of the debt-to-equity ratio, Ansys has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.17.

Key Takeaways

For the PE, PB, and PS ratios, Ansys has a low valuation compared to its peers in the Software industry. This suggests that the company may be undervalued relative to its earnings, book value, and sales.

In terms of ROE, EBITDA, gross profit, and revenue growth, Ansys has low performance compared to its industry peers. This indicates that the company may have lower profitability, operational efficiency, and growth potential compared to its competitors in the Software industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.