Trade-Ideas: Aspen Technology (AZPN) Is Today's

Trade-Ideas LLC identified Aspen Technology ( AZPN) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Aspen Technology as such a stock due to the following factors:

  • AZPN has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $40.6 million.
  • AZPN has traded 213,672 shares today.
  • AZPN is up 3.1% today.
  • AZPN was down 10.1% yesterday.

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More details on AZPN:

Aspen Technology, Inc. provides software and services to the process industries worldwide. The company operates in two segments, Subscription and Software, and Services. AZPN has a PE ratio of 32. Currently there are 2 analysts that rate Aspen Technology a buy, 1 analyst rates it a sell, and 1 rates it a hold.

The average volume for Aspen Technology has been 537,300 shares per day over the past 30 days. Aspen Technology has a market cap of $3.6 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.92 and a short float of 4.2% with 3.62 days to cover. Shares are up 7.8% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Aspen Technology as a sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:
  • AZPN has underperformed the S&P 500 Index, declining 8.48% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Net operating cash flow has declined marginally to $53.57 million or 8.02% when compared to the same quarter last year. Despite a decrease in cash flow ASPEN TECHNOLOGY INC is still fairing well by exceeding its industry average cash flow growth rate of -27.97%.
  • The gross profit margin for ASPEN TECHNOLOGY INC is currently very high, coming in at 90.35%. It has increased from the same quarter the previous year.
  • ASPEN TECHNOLOGY INC has improved earnings per share by 24.1% 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. This trend suggests that the performance of the business is improving. During the past fiscal year, ASPEN TECHNOLOGY INC increased its bottom line by earning $1.34 versus $0.92 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus $1.34).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 15.5% when compared to the same quarter one year prior, going from $26.68 million to $30.81 million.

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