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PTC's Q2 Strong as Digital Transformation Trends Persist in Switch to SaaS; Maintain $88 FVE

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

PTC’s second-quarter results were strong, as the software company benefited from customers’ continuation on the digital transformation journey and the company’s deferred annual recurring revenue has reached prepandemic levels. Revenue and profitability came in above our expectations thanks to PTC’s core and growth offerings, which are seeing an ongoing shift to software-as-a-service offerings. PTC raised its forecast for the year ahead, largely due to foreign-exchange expectations. We’re maintaining our $88 fair value estimate for the narrow-moat name and view the shares as overvalued, trading near $148 after hours April 28.

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Company Profile

Business Description

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%).

Contact
121 Seaport Boulevard
Boston, MA, 02210
T +1 781 370-5000
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 30, 2021
Stock Type Classic Growth
Employees 6,243

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