Stock Analyst Note
AspenTech Earnings: Blowout Results, a Headcount Reduction, and a Russian Exit
After wide-moat AspenTech reported blowout results for its fiscal fourth quarter, we are raising our fair value estimate to $215 per share, from $195 previously. Post-quarter, the firm enacted a 5% companywide headcount reduction, which should help boost margins going forward. Given new US sanctions on Russia, AspenTech is exiting the country, which while negatively affecting results, should drive better growth prospectively. Fourth-quarter results beat our aggressive revenue and margin expectations, while revenue guidance was light compared with our fiscal 2025 model but ahead on profitability. Based on these factors, we have adjusted our estimates accordingly. While deal push-outs were happening last quarter, deal pull-ins occurred this quarter in a still cautious macroeconomic environment. The stock is jumping after hours, and despite our fair value estimate increase, we still see some upside for the stock.