Aspen Technology Inc (AZPN) is scheduled to report first-quarter fiscal 2025 results on Nov. 4.

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The Zacks Consensus Estimate for total revenues is pegged at $270.7 million, indicating an increase of 8.6% from a year ago. The consensus estimate for the bottom line is currently pegged at $1.51, unchanged in the past 60 days, implying year-over-year growth of 30.2%.

The company missed the Zacks Consensus Estimate in two of the trailing four quarters and beat twice. It has a trailing four-quarter earnings surprise of 4.24%, on average. In the past year, shares of AZPN have gained 36.5% compared with the sub-industry’s growth of 45.8%.

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Factors to Note for AZPN’s Q1 Earnings Release

AZPN’s performance in the first quarter is likely to have benefited from solid demand momentum across energy and utilities markets. The company’s Subsurface Science & Engineering (SSE) segment is likely to have benefited from strong demand across the upstream market owing to rising upstream capital expenditure investments, especially from national oil companies.

Continued momentum in the digital grid management suite or DGM bodes well. The DGM segment is likely to have benefited from ongoing global electrification and grid upgrades. The company is likely to gain as customers are exploring sustainability solutions in critical minerals mining and low-carbon fuel alternatives.

The integration efforts among the Heritage AspenTech, DGM and SSE businesses are tailwinds. Further, management expects good progress in its commercial relationship with Emerson to have benefited its performance.

Aspen Technology, Inc. Price and EPS Surprise

Aspen Technology, Inc. price-eps-surprise | Aspen Technology, Inc. Quote

Healthy uptake across the Manufacturing & Supply Chain suite despite the extended downturn in the chemicals sector bodes well. Further, AZPN’s efforts to simplify its go-to-market strategy for its Asset Performance Management suite or APM is likely to have aided revenues from this segment.

Dynamic macroeconomic environment and other geopolitical factors remain headwinds along with a pullback in customer software spending in the chemical sector. Aspen Technology has initiated a workforce reduction of nearly 5% to streamline operations and enhance efficiency. This restructuring is expected to incur expenses between $7 million and $9 million in fiscal 2025. The majority of the costs are expected to be incurred in the first half of 2025, primarily due to severance and contract termination costs.

Earnings Whispers for AZPN

Our proven model does not conclusively predict an earnings beat for AZPN this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. 

AZPN currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

BlackSky Technology Inc. BKSY currently has an Earnings ESP of +29.51% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. 

BKSY is scheduled to report quarterly earnings on Nov. 7. The Zacks Consensus Estimate for BKSY’s to-be-reported quarter’s bottom line is pegged at a loss of 61 cents. The consensus estimate for revenues is pegged at $26.9 million. Shares of BKSY have lost 31.9% in the past year.

Yelp Inc. YELP presently has an Earnings ESP of +15.48% and a Zacks Rank #1. YELP is scheduled to report quarterly numbers on Nov. 7. The Zacks Consensus Estimate for YELP’s to-be-reported quarter’s earnings and revenues is pegged at 40 cents per share and $362.1 million, respectively. Shares of YELP have lost 20.2% in the past year.

Fortinet, Inc. FTNT has an Earnings ESP of +1.25% and a Zacks Rank #1 at present. Fortinet is scheduled to report quarterly figures on Nov. 7. The Zacks Consensus Estimate for FTNT’s to-be-reported quarter’s earnings and revenues is pegged at 51 cents per share and $1.48 billion, respectively. Shares of FTNT have increased 36.6% in the past year.

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