ANSYS (ANSS) Hits 52-Week High: What's Behind The Rally?

Shares of ANSYS, Inc. (NASDAQ:ANSS) rallied to a 52-week high of $161.95 on Jan 19, eventually closing a tad lower at $161.54.

The momentum can be attributed to strong adoption of the company’s products, portfolio strength, and expanding partner base. These factors are helping ANSYS to maintain a dominant position in the simulation software market.

Notably, the stock has returned 72.7% in the past year, outperforming the industry’s rally of 39.4%. The stock has a market cap of $12.26 billion.

What’s Driving the Stock?

ANSYS solutions are in demand due to the rising complexity in product design and wide scale adoption by major manufacturing concerns.

The company’s latest ANSYS 18 release offers new enhanced product features, which are a game changer for the company in the simulation software market. The product delivers simulation solutions for developing autonomous vehicle, high-performance chips for advanced driver assistance systems (ADAS) and IoT products.

Per Forbes market data, B2B spending on IoT technologies, apps and solutions will reach $267 billion by 2020. With its increasing innovations to address enterprise IoT needs, we believe that ANSYS is well positioned to gain from an increase in spending.

Partnerships and Acquisitions—Key Growth Drivers

Increasing collaborations and acquisitions are driving growth for the company. ANSYS has partnered with major CAD vendors- Autodesk (NASDAQ:ADSK), PTC and Siemens to provide data transfer services as well as build geometry modeling software solutions. The company is also increasing its reach in the cloud computing market on the back of its partnership with Amazon (NASDAQ:AMZN) Web Services (AWS).

ANSYS collaborations with companies like NVIDIA (NASDAQ:NVDA) , Ferrari (NYSE:RACE), Taiwan Semiconductor (NYSE:TSM) , Synopsys (NASDAQ:SNPS) and Grundfos have put forward a varied range of products ranging from automotive reliability solutions, live simulation software, and high performance steering wheels. These collaborations are not only enabling it to bring innovative solutions to the market but are also aiding the company to enhance its foothold in the competitive simulations market.

Moreover, the company’s dynamic partner ecosystem, delivering services such as solution, channel and academic partnerships is the reason behind its deal wins.

Its aggressive acquisition strategy has played a pivotal part in developing the company’s business in the last few years. With the help of strategic acquisitions such as SpaceClaim Corp, Reaction Design and Evolutionary Engineering, the company is now able to bring innovative products in the fields of 3D modeling, chemistry solutions and cloud computing respectively.

Recently, ANSYS acquired 3DSIM, a leading additive manufacturing simulation technology company. This acquisition will help the company to foray into 3D metal printing and access the industry's only complete additive manufacturing simulation workflow.

Encouraging Earnings Surprise History & Estimate Revisions

This Zacks Rank #3 (Hold) stock outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average positive earnings surprise of 6.27%.

Over the last 60 days, first-quarter fiscal 2018 estimates were revised upward, taking the Zacks Consensus Estimate up from 95 cents to 97 cents per share.

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