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PTC Inc PTC

Morningstar Rating
$166.61 +3.37 (2.06%)
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Company Report

PTC Earnings: Strong ARR Growth and Momentum Building; Valuation Raised to $138 from $125

Narrow-moat PTC finished its fourth quarter of fiscal 2023 with results slightly below our estimates for both the top and bottom lines. However, more relevant is its solid annualized recurring revenue growth which we view as a better indicator of the firm’s business performance. PTC’s outlook for fiscal 2024 was above our expectations on the top line, and management raised its ARR guidance as PTC builds product momentum, particularly from its Windchill and Codebeamer offerings. Difficult macroenvironment and foreign exchange volatility figures are likely to persist throughout fiscal 2024, but we are encouraged by PTC’s ARR growth, customer retention, and interest in its software-as-a-service offering. When rolling our model forward and adjusting our fiscal 2024 assumptions, we are increasing our fair value estimate to $138 per share from $125 per share, leaving the stock as fairly valued.

Price vs Fair Value

PTC is trading at a 21% premium.
Price
$166.61
Fair Value
$291.00
Uncertainty
Medium
1-Star Price
$734.70
5-Star Price
$11.90
Economic Moat
Tfdwcj
Capital Allocation
Wzczhnql

Bulls Say, Bears Say

Bulls

PTC’s revenue should be able to grow significantly as its Internet of Things solutions take off.

Bears

PTC’s Internet of Things offering could struggle gaining momentum due to its lack of recognition on the factory floor.

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News

Trading Information

Previous Close Price
$163.24
Day Range
$162.80166.81
52-Week Range
$115.45166.81
Bid/Ask
$98.28 / $264.90
Market Cap
$19.87 Bil
Volume/Avg
920,429 / 766,217

Key Statistics

Price/Earnings (Normalized)
38.39
Price/Sales
9.48
Dividend Yield
Dividend Yield (Forward)
Total Yield

Company Profile

PTC offers high-end computer-assisted design (Creo) and product lifecycle management (Windchill) software as well as Internet of Things and AR industrial solutions. Founded in 1985, PTC has 28,000 customers, with revenue stemming mostly from North America (45%) and Europe (40%).
Sector
Technology
Industry
Software - Application
Stock Style Box
Mid Growth
Total Number of Employees
7,231

Competitors

Valuation

Metric
PTC
DSY
SIE
Price/Earnings (Normalized)
38.3940.6513.35
Price/Book Value
7.407.462.84
Price/Sales
9.4810.021.68
Price/Cash Flow
33.0436.7912.52
Price/Earnings
PTC
DSY
SIE

Financial Strength

Metric
PTC
DSY
SIE
Quick Ratio
0.661.421.01
Current Ratio
0.761.581.33
Interest Coverage
3.539.48
Quick Ratio
PTC
DSY
SIE

Profitability

Metric
PTC
DSY
SIE
Return on Assets (Normalized)
9.15%105.39%5.46%
Return on Equity (Normalized)
20.72%200.57%17.23%
Return on Invested Capital (Normalized)
14.16%141.54%7.04%
Return on Assets
PTC
DSY
SIE

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