Analyst: Buy Shares of This FAANG Competitor

ANSS stock hit a record high earlier

Jun 20, 2018 at 2:57 PM
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Goldman Sachs upgraded Ansys, Inc. (NASDAQ:ANSS) to "buy" from "neutral," and boosted its price target on the stock to $207 -- a 13% premium to current trading levels. The analyst in coverage said the engineering simulation software firm is well-positioned to withstand competition from big-cap tech companies like Amazon (AMZN) and Alphabet (GOOGL).

At last check, ANSS stock was up 3.5% to trade at $182.95, and earlier topped out at a record high of $183.48. This is just more of the same for the shares, though, which have catapulted more than 51% over the last 12 months, thanks to several sharp bounces off their 120-day moving average.

anss stock daily chart june 20

Today's pop has sparked a flood of activity in ANSS' typically quiet options pits, with 461 contracts traded so far -- six times what's typically seen, and volume pacing in the 98th annual percentile. The bulk of the activity is centered at the August 190 call, where it looks like new positions are being purchased for $4.09. If this is the case, breakeven at the close on Friday, Aug. 17, is $194.09 (strike plus premium paid).

More bullish brokerage notes could help keep the wind at Ansys stock's back. Heading into today's trading, eight of 11 analysts maintained a "hold" or worse rating on the equity, while the average 12-month price target of $163.67 represents a 10.5% discount to current trading levels.

Continued short covering could also create tailwinds for ANSS shares. Short interest edged down in the two most recent reporting period, but it would still take almost four days to cover the remaining bearish bets, at the equity's average pace of trading.


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