Aspen Technology, Inc. (AZPN) AI Stock Analysis

• Market Cap: $16.73B
• Dividend Yield: N/A
• Average Volume (3M): 830.69K
• Price to Earnings (P/E): 2917.5
• Beta (1Y): 0.57
• Revenue Growth: 7.90%
• EPS Growth: N/A
• Country: US
• Employees: 3,937
• Sector: Technology
• Sector Strength: 67
• Industry: Software
• EPS (TTM): 0.09
• Shares Outstanding: 63,308,000
• 10 Day Avg. Volume: 1,159,577
• 30 Day Avg. Volume: 830,693
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 14.67
• Price to Cash Flow (P/CF): 109.70
• P/FCF Ratio: 109.70
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 21.21
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $290.00
• Price Target Upside: 9.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Aspen Technology presents a stable financial position with strong cash flow and low leverage, yet faces profitability challenges. The technical indicators suggest a stable upward trend, albeit with some caution due to the high P/E ratio, indicating potential overvaluation. The overall score reflects a solid financial base but highlights the need for improved profitability and valuation adjustments.

Positive Factors

Acquisition

The transaction involves Emerson Electric acquiring all outstanding shares of Aspen Technology for a 10% premium, indicating confidence in Aspen's value.

Earnings

Aspen reported second-quarter results, with total revenue ahead of consensus reaching roughly $304 million, representing 18% growth.

Strategic Positioning

Aspen Technology is well-positioned to capitalize on industry trends such as sustainability, global electrification, and the growing need for digitization in process-manufacturing businesses.

Negative Factors

Cash Flow

Free cash flow was below expectations due to some collection push-outs.

Guidance

The company also did not provide guidance for the third quarter or updated outlook for full year 2025.

Macro Environment

There remains sensitivity to the current macro backdrop as a function of continued deal elongation and delayed end-market recovery.

Aspen Technology, Inc. Business Overview & Revenue Model

Company Description

Aspen Technology, Inc. (AZPN) is a global leader in asset optimization software, serving industries such as energy, chemicals, engineering, and construction. The company offers a suite of integrated software solutions that enable organizations to optimize their operational efficiencies, improve safety, and achieve sustainability goals. AspenTech's core products include process simulation, advanced process control, supply chain management, and predictive analytics software, all designed to enhance the performance and profitability of complex industrial operations.

How the Company Makes Money

Aspen Technology, Inc. generates revenue primarily through the sale of its software products and services. The company employs a subscription-based business model, offering its software on a licensing basis, which provides a steady stream of recurring revenue. Additionally, AspenTech offers maintenance and support services, which further contribute to its income. The company also engages in strategic partnerships and collaborations with industry leaders to expand its reach and enhance its product offerings. Key revenue streams include software licenses, maintenance fees, and professional services, all of which are critical to its financial performance.

Aspen Technology, Inc. Financial Statement Overview

Summary

Aspen Technology, Inc. demonstrates solid operational efficiencies and a strong balance sheet. However, recent profitability challenges and inconsistent revenue growth present significant risks. The company's robust cash flow position provides a buffer against these difficulties, but achieving sustainable profitability is crucial for future growth.

Income Statement

Aspen Technology, Inc. shows a decline in profitability with negative net income and EBIT in the TTM, reflecting operational challenges. However, the company has maintained a solid gross profit margin, indicating efficiency in core operations. Revenue growth has been inconsistent, with a notable rise from 2022 to 2023, but a slight decline in the most recent TTM period.

Balance Sheet

The balance sheet of Aspen Technology is strong with a high equity ratio and manageable debt levels, reflecting financial stability. The debt-to-equity ratio is low, indicating a conservative capital structure. However, the return on equity is negative due to recent losses, posing a concern for shareholders.

Cash Flow

The operating cash flow remains robust, exceeding net income, which is a positive indicator of cash generation capability. Free cash flow is also positive and shows growth, but the ratio of free cash flow to net income is high due to negative net income, suggesting reliance on non-operational cash improvements.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
1.13B	1.04B	482.31M	709.38M	590.18M
	Gross Profit
744.91M	670.59M	282.39M	649.23M	528.57M
	EBIT
-89.54M	-183.06M	22.60M	358.40M	248.82M
	EBITDA
403.47M	308.35M	182.42M	402.25M	300.77M
	Net Income Common Stockholders
-9.77M	-107.76M	41.94M	319.80M	229.67M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
236.97M	241.21M	449.73M	379.85M	287.80M
	Total Assets
14.07B	14.49B	14.97B	1.45B	1.23B
	Total Debt
98.00M	68.37M	352.77M	329.61M	467.44M
	Net Debt
-138.97M	-172.84M	-96.95M	-50.24M	179.65M
	Total Liabilities
1.26B	1.42B	1.80B	653.24M	738.79M
	Stockholders Equity
12.81B	13.07B	13.17B	800.76M	493.71M
Cash Flow		Free Cash Flow
335.27M	292.27M	224.20M	273.77M	241.84M
	Operating Cash Flow
339.89M	299.21M	230.42M	276.13M	243.26M
	Investing Cash Flow
-25.71M	-107.32M	-5.58B	-19.78M	-76.20M
	Financing Cash Flow
-294.27M	-383.77M	5.98B	-165.13M	49.44M

Aspen Technology, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 264.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZPN, the sentiment is Positive. The current price of 264.33 is below the 20-day moving average (MA) of 264.39, above the 50-day MA of 261.58, and above the 200-day MA of 233.37, indicating a neutral trend. The MACD of 0.60 indicates Positive momentum. The RSI at 54.35 is Neutral, neither overbought nor oversold. The STOCH value of 17.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZPN.

Aspen Technology, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDNS	80 Outperform	$84.14B	78.22	25.92%	―	19.55%	2.35%
SNPS	79 Outperform	$73.02B	35.30	16.27%	―	-1.19%	48.33%
ANSS	78 Outperform	$28.90B	48.23	10.23%	―	15.98%	35.52%
ADI	69 Neutral	$98.50B	63.33	4.43%	1.90%	-19.28%	-44.00%
AZPN	63 Neutral	$16.73B	2,917.55	0.05%	―	7.90%	―
PTC	63 Neutral	$19.20B	44.33	13.91%	―	4.66%	51.72%
Sector *	60 Neutral	$10.78B	10.47	-6.71%	2.99%	7.58%	-12.08%

Aspen Technology, Inc. Corporate Events

Aspen Technology Ends Credit Agreement Post-Acquisition

On March 12, 2025, Aspen Technology, Inc. terminated its Second Amended and Restated Credit Agreement with JP Morgan Chase Bank, N.A., following its acquisition by Emerson Electric Co. There were no borrowings under this credit facility prior to its termination, indicating a smooth transition in the acquisition process.

Aspen Technology Completes Merger and Delists from Nasdaq

On March 12, 2025, Aspen Technology, Inc. completed a merger that led to the termination of its 2022 Employee Stock Purchase Plan and the automatic termination of a Stockholders Agreement due to the parent company’s full ownership of its securities. As part of the merger, Aspen Technology notified Nasdaq to halt trading of its shares and initiated steps to delist and deregister them, effectively removing the shares from Nasdaq. The merger also resulted in a complete change in the board of directors and officers, with new leadership from the parent company taking over, and amendments to the company’s certificate of incorporation and bylaws.