Ansys Inc. develops and markets engineering simulation software and services used by engineers, designers, researchers, and students in the aerospace, automotive, materials and chemical processing, turbo machinery, consumer products, electronics, biomedical, energy, and defense and other industries, as well as academia worldwide. The company was founded in 1970 and is based in Canonsburg, Pennsylvania.
ANSS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Ansys Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Ansys Inc ranked in the 16th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. In terms of the factors that were most noteworthy in this DCF analysis for ANSS, they are:
Interest coverage, a measure of earnings relative to interest payments, is 151.99 -- which is good for besting 94.78% of its peer stocks (US stocks in the Technology sector with positive cash flow).
The business' balance sheet reveals debt to be 3% of the company's capital (with equity being the remaining amount). Approximately only 9.7% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
ANSS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 57.43% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ENV, NSIT, PTC, TTLO, and JKHY can be thought of as valuation peers to ANSS, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.