Education
About Us
Working with TipRanks
Follow Us
PTC (PTC)
NASDAQ:PTC
Top Page
PTC
(NASDAQ:PTC)
61Neutral
Positive Factors
Acquisition Strategy
The company's acquisition of ServiceMax should provide differentiation and longer-term opportunity to complete the digital thread to support asset-intensive industries.
Financial Performance
PTC reported good F1Q25 results, with a ~2% beat on revenue and a $0.21 beat on EPS.
Shareholder Returns
Management aims to maintain a strong cash position for company operations while returning excess to shareholders through initiatives such as the recently announced $2B share repurchase authorization.
Negative Factors
Foreign Exchange Impact
Unfavorable change in the FX environment presents the potential for a headwind this year.
Guidance
FY25 revenue guidance was lowered mainly due to FX headwinds.
Market Demand
The challenging demand environment continues to temper sentiment.
PTC (PTC) vs. S&P 500 (SPY)
Market Cap
$16.82B
Dividend YieldN/A
Average Volume (3M)1.08M
Price to Earnings (P/E)43.1
Beta (1Y)1.16
Revenue Growth6.05%
EPS Growth63.78%
CountryUS
Employees7,311
SectorTechnology
Sector Strength40
IndustrySoftware - Application
Share Statistics
EPS (TTM)3.24
Shares Outstanding120,323,540
10 Day Avg. Volume1,014,385
30 Day Avg. Volume1,083,048
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)N/A
Price to Sales (P/S)8.31
Price to Cash Flow (P/CF)20.20
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
$212.20Price Target Upside51.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
PTC Business Overview & Revenue Model
Company DescriptionPTC Inc. operates as software and services company in the Americas, Europe, and the Asia Pacific. The company operates in two segments, Software Products and Professional Services. It offers ThingWorx platform, which offers a set of capabilities that enable enterprises to digitally transform every aspect of their business with innovative solutions that are simple to create, easy to implement, scalable to meet future needs, and designed to enable customers to accelerate time to value; and Vuforia, which enables the visualization of digital information in a physical context and the creation of AR. The company also provides Onshape, a software-as-a-service product development platform unites computer-aided design with data management, collaboration tools, and real-time analytics; Arena, a PLM solution enables product teams to collaborate virtually anytime and anywhere; Creo, a 3D CAD technology enables the digital design, testing, and modification of product models; and Windchill, a product lifecycle management software. In addition, it offers Integrity, an application lifecycle management solution; Servigistics, service parts management solution; and consulting, implementation, training, cloud, and license and support services. The company was formerly known as Parametric Technology Corporation and changed its name to PTC Inc. in January 2013. PTC Inc. was incorporated in 1985 and is headquartered in Boston, Massachusetts.
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 demonstrates strong revenue growth and profitability with robust operational efficiency. However, balance sheet anomalies regarding stockholders' equity raise concerns about financial stability. Cash flow remains strong, indicating good operational flexibility, but caution is needed to address balance sheet issues.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 | ||||
| 196.34M | 265.81M | 288.10M | 272.18M | 326.53M | 303.59M | Total Assets |
| 6.08B | 6.38B | 6.29B | 4.69B | 4.52B | 3.38B | Total Debt |
| 1.72B | 1.93B | 1.89B | 1.56B | 1.65B | 1.22B | Net Debt |
| 1.52B | 1.66B | 1.60B | 1.29B | 1.32B | 944.88M | Total Liabilities |
| 2.85B | 3.17B | 3.61B | 2.39B | 2.48B | 1.94B | Stockholders Equity |
| 3.23B | 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
139.77
Price Trends
166.52
Negative
179.05
Negative
178.62
Negative
Market Momentum
-2.75
Negative
38.48
Neutral
22.16
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 139.77 is below the 20-day moving average (MA) of 157.17, below the 50-day MA of 166.52, and below the 200-day MA of 178.62, indicating a bearish trend. The MACD of -2.75 indicates Negative momentum. The RSI at 38.48 is Neutral, neither overbought nor oversold. The STOCH value of 22.16 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 (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $18.33B | 24.81 | 11.81% | 1.33% | 6.89% | 26.17% | |
77 Outperform | $15.67B | 14.12 | 68.18% | ― | 7.78% | 1345.45% | |
77 Outperform | $20.68B | 21.16 | 11.92% | ― | 3.05% | 55.96% | |
73 Outperform | $23.20B | 89.05 | 8.32% | ― | 9.53% | 56.32% | |
63 Neutral | $14.62B | 528.94 | -1.34% | ― | 17.16% | 67.81% | |
61 Neutral | $16.82B | 43.11 | 12.99% | ― | 6.05% | 63.78% | |
57 Neutral | $18.57B | 9.42 | -13.42% | 2.72% | 5.01% | -23.43% |
* Technology Sector Average
Performance Comparison
PTC
PTC
139.77
-46.64
-25.02%
GWRE
Guidewire
174.25
59.33
51.63%
SSNC
SS&C Technologies Holdings
74.35
12.53
20.27%
TYL
Tyler Technologies
538.24
120.04
28.70%
DOCU
DocuSign
72.21
12.55
21.04%
ZM
Zoom Video Communications
67.75
4.74
7.52%
PTC Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -26.34% | 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
Executive/Board ChangesBusiness Operations and Strategy
PTC Appoints Trac Pham to Board of Directors
Positive
Mar 13, 2025
On March 9, 2025, PTC Inc. announced the appointment of Trac Pham to its Board of Directors, effective March 17, 2025. Mr. Pham will also serve on the Audit Committee. His previous roles include Co-CEO and Interim COO at Sprinklr, and CFO at Synopsys, Inc., bringing extensive financial and strategic expertise to PTC. This appointment is expected to enhance PTC’s governance and strategic direction, potentially impacting its market positioning positively.
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.