The firm lowered the price target to $78 from $95 for the engineering simulation software developer.
Benchmark also cut annual EPS ratings to $3.32 from $3.36 for fiscal 2014, to $3.59 from $3.63 for fiscal 2015, and to $3.82 from $3.91 for fiscal 2016.
The firm said it lowered Ansys' rating following a softer than expected fiscal third quarter earnings release and because the company is seeing lower sales.
"While we don't expect the stock to fall much below the current range, we also don't see much appreciation potential until the company accelerates license growth consistently to the low double digit range," said Benchmark analyst Mark W. Schappel.
Shares of Ansys are up 1.22% to $78.00 in early afternoon trading.
Separately, TheStreet Ratings team rates ANSYS INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ANSYS INC (ANSS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ANSYS INC has improved earnings per share by 13.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ANSYS INC increased its bottom line by earning $2.59 versus $2.14 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $2.59).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 12.7% when compared to the same quarter one year prior, going from $55.95 million to $63.04 million.
- ANSS's revenue growth trails the industry average of 26.6%. Since the same quarter one year prior, revenues slightly increased by 8.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ANSS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, ANSS has a quick ratio of 2.28, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for ANSYS INC is currently very high, coming in at 89.65%. Regardless of ANSS's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ANSS's net profit margin of 27.12% compares favorably to the industry average.
- You can view the full analysis from the report here: ANSS Ratings Report