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Aspen Technology Inc
AZPN : NASDAQ : Technology
$43.95 | %
Today's Range: 43.78 - 44.39
Avg. Daily Volume: 697,300
05/22/15 - 3:59 PM ET

Financial Analysis


ASPEN TECHNOLOGY INC's gross profit margin for the third quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. ASPEN TECHNOLOGY INC has weak liquidity. Currently, the Quick Ratio is 0.89 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 131.08% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY15 Q3 FY14
Net Sales ($mil)111.3103.59
EBITDA ($mil)43.4932.76
EBIT ($mil)41.7331.38
Net Income ($mil)28.1720.84


Balance Sheet Q3 FY15 Q3 FY14
Cash & Equiv. ($mil)215.81256.84
Total Assets ($mil)317.07383.03
Total Debt ($mil)0.00.0
Equity ($mil)-26.7986.2


Profitability Q3 FY15 Q3 FY14
Gross Profit Margin90.5286.57
EBITDA Margin39.0731.62
Operating Margin37.4930.3
Sales Turnover1.350.97
Return on Assets36.0420.75
Return on Equity0.092.22
Debt Q3 FY15 Q3 FY14
Current Ratio0.941.31
Debt/Capital0.00.0
Interest Expense0.00.01
Interest Coverage41731.05230.5


Share Data Q3 FY15 Q3 FY14
Shares outstanding (mil)86.0492.25
Div / share0.00.0
EPS0.320.22
Book value / share-0.310.93
Institutional Own % n/a n/a
Avg Daily Volume712027.0800917.0

Valuation


HOLD. ASPEN TECHNOLOGY INC's P/E ratio indicates a discount compared to an average of 35.68 for the Software industry and a significant premium compared to the S&P 500 average of 20.75. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, ASPEN TECHNOLOGY INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AZPN 34.16 Peers 35.68   AZPN 19.24 Peers 26.60

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

AZPN is trading at a valuation on par with its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AZPN is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AZPN 27.99 Peers 39.33   AZPN 0.63 Peers 1.19

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

AZPN is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AZPN trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AZPN NM Peers 6.09   AZPN 51.19 Peers 156.30

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AZPN's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AZPN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AZPN 8.73 Peers 6.19   AZPN 14.62 Peers 15.50

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AZPN is trading at a significant premium to its industry.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

AZPN is keeping pace with its peers on the basis of sales growth.

 

 

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