Software developer Aspen Technology, Inc. (NASDAQ: AZPN) received a positive recommendation from finance firm Piper Sandler. At the auction on July 1, AZPN’s share was worth $191.24. The market capitalization was $12.24 billion.
The recent acquisition will significantly boost Aspen’s revenue and improve the company’s financial outlook, said Weston Twigg, an analyst at Piper Sandler.
In May 2022, Aspen Technology, Inc. (AZPN) completed its merger with Emerson Electric. All Emerson developments will be integrated into the Aspen ecosystem, and the most valuable asset, geological modeling software, will operate as a division called GSS Emerson.
In fact, we are talking about a deep partnership. The companies will combine research and development, in particular in the field of software to improve the reliability and efficiency of power grids. In general, larger target markets have now opened up for AZPN, primarily utility companies, and large grid operators.
In addition, Emerson’s GSS division will offer a complete solution for oil and gas companies. Emerson also has a strong position in the narrow segments of the digital transformation of the water and food industries.
Aspen Technology, Inc. (AZPN) has a large portfolio of software and services for the digital transformation of organizations ranging from mining and chemical companies to owners of large wind farms and biotech companies.
According to analyst Piper Sandler, the combined company of Aspen and Emerson is able to increase annual income by 9-13%, while earlier revenue growth for Aspen Technology, Inc. (AZPN) alone was predicted in the range of 5-12%. Against this backdrop, Piper Sandler gave a neutral recommendation on AZPN shares and set a target price of $175.
In the coming year, revenue growth may slow due to Aspen Technology, Inc. (AZPN)’s departure from the model of selling perpetual digital licenses. But for now, the company itself maintains its forecast for average annual revenue growth of 15% until 2024.