Aspen Technology: This Is A Reasonably Compelling Entry Point, Says Canaccord

In a research note issued August 22, Canaccord analyst Richard Davis maintained a Buy rating on Aspen Technology (NASDAQ: AZPN), followoing the last week’s 7% post fourth-quarter sell off. No price target was provided.

Davis noted, “It’s rare that AZPN shares go “on sale,” but with last week’s 7% post Q4/14 sell off, we believe we’re at a reasonably compelling entry point. We heard a few recurring pushbacks off of the print – LTCV growth was a two-year low, annual spend decelerated sequentially (back to normal levels), and the FCF guide implies high- single-digit growth – but our response and long-standing opinion have been steadfast: AZPN has one of the most defensible franchises in all of software, and the firm should continue to be a low-double-digit organic grower with operating margins that expand to at least 45%+, which should result in predictable, 15-20% tax-adjusted earnings growth.” And concludes: “With the stock trading at 18x our C2015 FCF/share estimate, or basically a 1.0x PE/G, we think this is an attractive price for long-term holders to get involved.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Richard Davis has a total average return of 5.3% and a 56.4% success rate. Davis has a 22.1% average return when recommending AZPN, and is ranked #527 out of 3256 analysts.


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