Capitalcube gives Aspen Technology, Inc. a score of 78.
Our analysis is based on comparing Aspen Technology, Inc. with the following peers – QAD Inc. Class B, Rockwell Automation, Inc., PTC Inc., SAP SE Sponsored ADR, Honeywell International Inc. and General Electric Company (QADB-US, ROK-US, PTC-US, SAP-US, HON-US and GE-US).
Aspen Technology, Inc. has a fundamental score of 78 and has a relative valuation of OVERVALUED.
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- With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
- Aspen Technology, Inc. currently has a negative book value but trades at a higher Price/Asset ratio (17.72) than its peer median (2.46).
- AZPN-US‘s book value of equity is not positive and suggests that that it is not meaningful to analyze its ROE versus P/E in order to determine whether the company has an operating or growth advantage.
- AZPN-US has a successful operating model with relatively high net profit margins and asset turns.
- The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
- AZPN-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
- The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
- While AZPN-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
- The company’s level of capital investment is relatively low and suggests it is milking the business.
- AZPN-US has the financial and operating capacity to borrow quickly.
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Leverage & Liquidity
AZPN-US has the financial and operating capacity to borrow quickly.
- With debt at a relatively low 3.16% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 12.88%), and a well-cushioned interest coverage level of 59.35x, AZPN-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
- Of the 6 chosen peers for the company, only 5 of the stocks have an outstanding debt balance. Companies with no debt include SAP-US.
AZPN-US has maintained its Quick & Able profile from the recent year-end.
- AZPN-US‘s interest coverage is downward trending and is below (but within one standard deviation of) its five-year average interest coverage of 962.16x.
- While its interest coverage decreased to 59.35x from 178.70x (in 2016), its peer median increased during this period to 14.05x from 11.56x.
- Interest coverage fell 121.84 points relative to peers.
- AZPN-US‘s debt-EV has declined 1.44 percentage points from last year’s high but remains above its five-year average debt-EV of 2.57.
- Though its debt-EV decreased to 3.16% from 4.60% (in 2016), its peer median remained relatively stable during this period at 12.88%.
- Relative to peers, debt-EV fell 1.44 percentage points.
Access the detailed analysis for Aspen Technology, Inc.
Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|QAD Inc. Class B||3.32||1.48||5.02||86.79|
|Rockwell Automation, Inc.||12.88||3.5||14.05||53.63|
|SAP SE Sponsored ADR||7.72||1.2||17.05||118.1|
|Honeywell International Inc.||15.61||1.36||22.05||36|
|General Electric Company||36.91||1.38||2.26||5.53|
|Aspen Technology, Inc.||3.16||0.34||59.35||115.78|
|Best In Class||3.16||3.5||59.35||118.1|
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Aspen Technology, Inc. engages in the provision of process optimization software solutions designed to manage and optimize plant and process design, operational performance, and supply chain planning. The company’s aspenONE software and related services have been developed specifically for companies in the process industries, including the energy, chemicals, and engineering and construction industries. It operates through the following segments: Subscription & Software, and Services. The Subscription & Software segment engages in the licensing of process optimization software solutions and associated support services. The Services segment includes professional services and training. The company was founded by Lawrence B. Evans in 1981 and is headquartered in Bedford, MA.
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