ANSS – Market expectations are for record-high Uniform ROA, but management may have concerns about SMB customers, simulation demand, and the ANSYS start-up program

• ANSYS, Inc. (ANSS:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 50.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about the pace of SMB customer recovery, simulation demand in the auto industry, and their start-up program.
  
• Specifically, management may lack confidence in their ability to target small and medium-sized business customers, sustain success with their pervasive simulation strategy, and capitalize on growing simulation demand in the auto industry. In addition, they may have concerns about the pace of recovery of SMB customers, the potential of their start-up program participants to become mainline customers, and the time it takes for commercial aerospace customers to ramp up investments. Furthermore, management may be exaggerating their overall simulation capabilities, the appeal of their products across all company sizes, and their attractiveness as a workplace. Finally, they may lack confidence in their ability to continue benefiting from their Microsoft Azure partnership and address the needs of manufacturing engineers.