Education
About Us
Working with TipRanks
Follow Us
PTC (PTC)
NASDAQ:PTC
Top Page
PTC
(NASDAQ:PTC)63Neutral
Positive Factors
Acquisition
The company's acquisition of ServiceMax should provide differentiation and longer-term opportunity to complete the digital thread to support asset-intensive industries in design.
Earnings
PTC reported good F1Q25 results, with a ~2% beat on revenue and a $0.21 beat on EPS.
Share repurchase
A $2B share repurchase authorization was announced, representing approximately two-thirds of estimated free cash flow over the same period.
Negative Factors
Demand environment
The challenging demand environment continues to temper sentiment.
FX headwinds
FY25 revenue guidance was lowered mainly due to FX headwinds.
GTM strategy
GTM strategy change will likely disrupt business in the near term.
PTC (PTC) vs. S&P 500 (SPY)
Market Cap
$19.06B
Dividend YieldN/A
Average Volume (3M)1.28M
Price to Earnings (P/E)48.9
Beta (1Y)1.19
Revenue Growth6.05%
EPS Growth63.78%
CountryUS
Employees7,501
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)3.24
Shares Outstanding120,323,540
10 Day Avg. Volume1,123,650
30 Day Avg. Volume1,277,353
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)N/A
Price to Sales (P/S)8.35
Price to Cash Flow (P/CF)20.30
P/FCF Ratio18.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$214.33Price Target Upside32.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
PTC Business Overview & Revenue Model
Company DescriptionPTC, Inc. engages in the development and provision of software-based product management and development solutions. It operates through the Software products and Professional Services segments. The Software Products segment includes license, subscription and related support revenue for its products. The Professional Services segment consists of consulting, implementation and training services. The company was founded in 1985 and is headquartered in Boston, MA.
How the Company Makes MoneyPTC Inc. makes money through a variety of revenue streams primarily centered around its software solutions and services. The company generates revenue from the sale of perpetual licenses, subscription-based licenses, and software maintenance agreements for its CAD, PLM, IoT, and AR platforms. Additionally, PTC earns revenue from consulting, implementation, and training services that support the deployment and utilization of its software products. The company also benefits from strategic partnerships and collaborations with leading technology companies, which help expand its market reach and enhance its product offerings. PTC's revenue model emphasizes recurring income through subscriptions and long-term customer relationships, contributing significantly to its financial stability and growth.
PTC Financial Statement Overview
Summary
PTC displays strong revenue growth and profitability metrics, as indicated by a high income statement score of 85. However, concerns arise from the balance sheet, which shows a lack of stockholders' equity, reducing its score to 45. Cash flows are robust, supporting operational flexibility, with a score of 75. Overall, financial performance is strong but marred by balance sheet anomalies.Income Statement
PTC has demonstrated strong growth in revenue, with a notable 10.5% increase from 2023 to 2024 (TTM). The company maintains healthy gross and net profit margins at approximately 79.8% and 16.9% respectively for TTM, reflecting its efficient cost management. EBIT and EBITDA margins are also robust at 25.3% and 28.9%, indicating strong operational efficiency. However, the slight decrease in EBIT from the previous annual report highlights the need for cautious monitoring of operational expenses.85
Very Positive
Balance Sheet
The balance sheet reveals a concerning lack of stockholders' equity in the TTM report, which suggests financial restructuring or a very high payout. Previously, the debt-to-equity ratio was moderate at 0.60, indicating manageable leverage. The equity ratio stood at 50.4%, showing a solid equity base before the recent data anomaly. Despite these strengths, the absence of equity and liabilities in the latest TTM report poses potential financial risks and warrants further investigation.45
Neutral
Cash Flow
PTC shows a strong free cash flow growth of 7.2% in the TTM period, indicating efficient cash management and operational performance. The operating cash flow to net income ratio is 2.04, reflecting the company's ability to generate cash from operations. The free cash flow to net income ratio is also strong at 2.01, showcasing PTC's capability to convert profits into cash. However, fluctuations in financing activities suggest the company should monitor its capital structure closely.75
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.31B | 2.30B | 2.10B | 1.93B | 1.81B | 1.46B | Gross Profit |
| 1.85B | 1.81B | 1.66B | 1.55B | 1.44B | 1.12B | EBIT |
| 585.37M | 588.06M | 458.47M | 447.36M | 380.75M | 210.86M | EBITDA |
| 668.10M | 730.02M | 599.14M | 573.41M | 564.77M | 291.95M | Net Income Common Stockholders |
| 392.18M | 376.33M | 245.54M | 313.08M | 476.92M | 130.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 248.97M | 265.81M | 288.10M | 272.18M | 326.53M | 303.59M | Total Assets |
| 6.21B | 6.38B | 6.29B | 4.69B | 4.52B | 3.38B | Total Debt |
| 2.19B | 1.93B | 1.89B | 1.56B | 1.65B | 1.22B | Net Debt |
| 1.94B | 1.66B | 1.60B | 1.29B | 1.32B | 944.88M | Total Liabilities |
| 3.26B | 3.17B | 3.61B | 2.39B | 2.48B | 1.94B | Stockholders Equity |
| 2.94B | 3.21B | 2.68B | 2.30B | 2.04B | 1.44B |
| Cash Flow | Free Cash Flow | ||||
| 788.49M | 735.61M | 586.25M | 409.38M | 343.55M | 202.56M | Operating Cash Flow |
| 801.07M | 749.98M | 610.86M | 435.33M | 368.81M | 233.81M | Investing Cash Flow |
| 23.07M | -107.83M | -858.51M | -229.47M | -688.82M | -525.97M | Financing Cash Flow |
| -880.07M | -667.70M | 260.71M | -235.82M | 371.23M | 297.41M |
PTC Technical Analysis
Negative
161.16
Price Trends
178.79
Negative
185.23
Negative
180.82
Negative
Market Momentum
-5.99
Positive
32.01
Neutral
27.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTC, the sentiment is Negative. The current price of 161.16 is below the 20-day moving average (MA) of 166.77, below the 50-day MA of 178.79, and below the 200-day MA of 180.82, indicating a bearish trend. The MACD of -5.99 indicates Positive momentum. The RSI at 32.01 is Neutral, neither overbought nor oversold. The STOCH value of 27.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PTC.
PTC Risk Analysis
PTC disclosed 22 risk factors in its most recent earnings report. PTC reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PTC Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $57.50B | 52.11 | 49.69% | ― | 12.46% | 22.28% | |
66 Neutral | $66.14B | 63.49 | 26.13% | ― | 13.48% | 0.66% | |
66 Neutral | $28.33B | 49.39 | 9.46% | ― | 12.11% | 14.35% | |
63 Neutral | $19.06B | 48.87 | 12.14% | ― | 6.05% | 63.78% | |
63 Neutral | $68.88B | 33.12 | 16.27% | ― | -1.19% | 48.33% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
PTC
PTC
161.16
-21.70
-11.87%
ANSS
Ansys
327.78
-8.08
-2.41%
ADSK
Autodesk
267.24
16.14
6.43%
CDNS
Cadence Design
244.70
-67.95
-21.73%
SNPS
Synopsys
447.96
-128.01
-22.23%
DSGX
The Descartes Systems Group
110.92
23.60
27.03%
PTC Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -15.07% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted PTC's strong financial performance in ARR and free cash flow, progress in go-to-market transformation, and advancements in AI and product innovations. However, the company continues to face challenges in the selling environment and relies on a back-loaded ARR growth trajectory.Highlights
ARR and Free Cash Flow Performance
PTC reported a constant currency ARR of $2.277 billion, up 11% year-over-year. Free cash flow was up 29% year-over-year, reaching $236 million in Q1.
Go-to-Market Transformation Progress
Significant progress was made in reshaping the go-to-market organization to be vertically oriented, with new leadership roles added and strategic hires in growth marketing and sales enablement.
AI and Product Innovations
PTC launched AI-powered features in its ServiceMax offering, with plans to introduce similar functionalities across Codebeamer and other products, highlighting customer collaboration with Volkswagen Group and Microsoft.
SaaS and Product Portfolio Developments
Onshape, a cloud-native SaaS platform, delivered 17 significant releases over the past year, including cloud-native CAM and advanced surfacing tools.
Lowlights
Challenging Selling Environment
PTC continued to face a sluggish selling environment, impacting close rates and ARR growth.
Deferred ARR and Contract Churn
Q1 ARR growth was impacted by deferred ARR linearity and churn from a couple of contracts, which are expected to return later in the fiscal year.
Back-Loaded Year for ARR Growth
The ARR growth for fiscal 2025 is expected to be back-half loaded, indicating potential volatility and reliance on a strong performance in Q3 and Q4.
Company Guidance
During PTC's 2025 first quarter conference call, the company provided guidance for fiscal 2025, reiterating their annual recurring revenue (ARR) growth target of 9% to 10% and projecting free cash flow between $835 million and $850 million. Their constant currency ARR at the end of Q1 2025 was $2.277 billion, reflecting an 11% year-over-year increase. The company highlighted its go-to-market transformation efforts, which are expected to take full effect by the end of the fiscal year, aligning with their strategic focus on vertical markets. PTC also discussed the integration of AI across its product portfolio, emphasizing advancements in ServiceMax and Codebeamer. Additionally, the company reported a 29% year-over-year growth in free cash flow, reaching $236 million in Q1, even after accounting for $11 million in outflows related to their go-to-market realignment. PTC aims to maintain a low cash balance, planning to buy back approximately $300 million of its common stock in fiscal 2025.PTC Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
PTC Announces Strong Growth and Stock Repurchase Plan
Positive
Nov 6, 2024
PTC’s financial performance in fiscal year 2024 showed promising growth, with a 14% increase in ARR and over 20% in cash flow growth. The company announced a $2 billion stock repurchase authorization through 2027, aiming to enhance shareholder returns. For fiscal year 2025, PTC forecasts ARR growth of 9-10% and free cash flow of $835 to $850 million, signaling continued confidence in its differentiated product strategy and subscription model.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.