Ansoft's Dizzying Run-Up ANST
Ansoft, which makes design automation software, ran up sharply today after announcing earnings. The shares were up almost 80% already from their 52-week high, which was $10.66. The stock is currently changing hands at $21.
The quarter was good. For the fiscal fourth quarter, ending April 30, revenue hit $24.7 million, up 14% from $21.7 million in the same period a year ago. Operating income was up 39% from $6.3 million to $8.8 million. For the full fiscal year, revenue rose 14% from from $67.7 to $72.2. Operating income for the twelve months did even better up 77% from $11.4 to $20.2 million.
Ansoft guided that next fiscal year's revenues would rise 10% to 15%, which seems terribly soft in light of the fiscal Q4 results. It did not seem to matter to anyone, as the stock moved up 13% at mid-day.
It is hard to see what all the excitement is about. From fiscal 2003 to 2004, revenue grew 15%. From 2004 to 2005, revenue rose 24%. For the fiscal just ending, revenue is up 14%, and the company is guiding for no better.
Is Ansoft doing well? Yes. Does it deserve to have doubled to $21 and have a price to sales ratio of almost six? Almost certainly not.
Ansoft will have to move its topline up a good deal more than another 14% to keep the stock at this premium price.
Douglas A. McIntyre
The quarter was good. For the fiscal fourth quarter, ending April 30, revenue hit $24.7 million, up 14% from $21.7 million in the same period a year ago. Operating income was up 39% from $6.3 million to $8.8 million. For the full fiscal year, revenue rose 14% from from $67.7 to $72.2. Operating income for the twelve months did even better up 77% from $11.4 to $20.2 million.
Ansoft guided that next fiscal year's revenues would rise 10% to 15%, which seems terribly soft in light of the fiscal Q4 results. It did not seem to matter to anyone, as the stock moved up 13% at mid-day.
It is hard to see what all the excitement is about. From fiscal 2003 to 2004, revenue grew 15%. From 2004 to 2005, revenue rose 24%. For the fiscal just ending, revenue is up 14%, and the company is guiding for no better.
Is Ansoft doing well? Yes. Does it deserve to have doubled to $21 and have a price to sales ratio of almost six? Almost certainly not.
Ansoft will have to move its topline up a good deal more than another 14% to keep the stock at this premium price.
Douglas A. McIntyre
posted by douglas mcintyre at 12:57 PM
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