Aspen Technology Inc. (AZPN) provides asset optimization software globally. Its software platform helps companies in capital-intensive industries to maximize uptime and deliver high returns over the full lifecycle of assets.
Last week, Australian gold miner Evolution Mining deployed AspenTech’s software solution to mitigate unplanned downtime and enhance plant performance.
Let us take a look at the Q4 numbers of the company and understand what has changed in its key risk factors that investors should know.
AspenTech’s recent Q4 performance was a mixed bag. Its Q4 revenues stood at $198 million, lagging the Street’s estimates by $8 million. The company had reported revenues of $202 million in the same quarter last year. This decrease was due to lower revenues from License and Maintenance segments, however, partially offset by higher Services and Other revenues.
While operating expenses increased during this period, a lower provision for income tax helped earnings per share improve to $1.53 versus $1.49 a year ago, beating consensus by $0.08 per share. (See AspenTech stock chart on TipRanks)
For Fiscal Year 2022, AspenTech estimates total revenue to be in the range of $702 million and $737 million. It sees earnings per share landing between $4.79 and $5.17.
The President and CEO of AspenTech, Antonio Pietri, said, “As we enter fiscal 2022, we are optimistic about the long-term opportunity for AspenTech…We are confident in our ability to return to double-digit annual spend growth over time as economic conditions and industry budgets normalize.”
On August 12, KeyBanc analyst Jason Celino reiterated a Buy rating on the stock and increased the price target to $155 from $150.
Celino believes AspenTech is expecting resetting of customer budgets at the end of Calendar Year 2021.
Consensus on the Street is a Moderate Buy based on 3 Buys, 1 Hold, and 1 Sell. The average Aspen Technology price target of $148 implies 16.7% upside potential. Shares have declined 13% over the past month.
Now, let’s have a look at what’s changed in the company’s key risk factors.
According to the new Tipranks’ Risk Factors tool, AspenTech’s main risk categories are Finance & Corporate, Tech & innovation, and Macro & Political, which account for 27% each, of the total 15 risks identified. Since June, the company has changed one key risk factor.
Under the Finance & Corporate risk category, AspenTech acknowledges that, as part of its business strategy, it may seek acquisitions or investments in new or complementary businesses, technologies, or products.
These potential acquisitions and investment transactions could be difficult to integrate into its business operations and result in business disruption, stockholder value dilution, and impairment of financial performance. Further, there can be no certainty that the company will successfully make acquisitions in the future.
The Finance & Corporate risk factor’s sector average stands at 39%, compared to AspenTech’s 27%.
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