PTC Inc. (PTC)
NASDAQ:PTC
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PTC
(NASDAQ:PTC)
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Rating:79Outperform
Price Target:
$168.00
▲(20.22% Upside)
Action:Reiterated
Date:05/09/26
Score is driven primarily by strong financial performance (material margin expansion, improving leverage, solid free cash flow) and an attractive low P/E valuation. The latest earnings call adds support via raised guidance and aggressive buybacks, though execution/macro risks and reliance on back-half performance temper the outlook. Technicals are mixed, with negative MACD and the stock still below longer-term moving averages.
Positive Factors
High and expanding margins
PTC's materially expanded margins (TTM net ~42%, EBIT ~39%) reflect strong operating leverage and pricing power in its software portfolio. Durable high gross margins provide room to invest in R&D, fund buybacks or manage downturns while preserving cash generation and profitability over multiple quarters.
Negative Factors
Uneven and slowing revenue growth
Top-line growth has been inconsistent, with FY2025 nearly flat and only modest re-acceleration on a TTM basis. Slower revenue expansion limits the sustainability of operating leverage benefits, increases reliance on margin gains and buybacks to drive EPS, and may lag many faster-growing software peers over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
High and expanding margins
PTC's materially expanded margins (TTM net ~42%, EBIT ~39%) reflect strong operating leverage and pricing power in its software portfolio. Durable high gross margins provide room to invest in R&D, fund buybacks or manage downturns while preserving cash generation and profitability over multiple quarters.
Read all positive factors
PTC Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyPTC (PTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.85B
Dividend YieldN/A
Average Volume (3M)1.41M
Price to Earnings (P/E)7.1
Beta (1Y)0.97
Revenue Growth27.75%
EPS Growth187.41%
CountryUS
Employees7,512
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)10.52
Shares Outstanding115,505,790
10 Day Avg. Volume1,292,019
30 Day Avg. Volume1,405,791
Financial Highlights & Ratios
PEG Ratio0.35
Price to Book (P/B)6.37
Price to Sales (P/S)8.89
P/FCF Ratio28.44
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue6.02
Enterprise Value/Gross Profit7.14
Enterprise Value/Ebitda13.97
Forecast
1Y Price Target
$182.85Price Target Upside30.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)7.68
Revenue Forecast (FY)$2.69B
PTC Business Overview & Revenue Model
Company Description
PTC 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 t...
How the Company Makes Money
PTC primarily makes money by selling software licenses and subscriptions for its industrial software portfolio and related support/services. A key revenue stream is recurring subscription revenue from time-based access to its PLM, CAD, ALM, IoT, a...
PTC Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call emphasized multiple positive operational and financial trends: ARR growth at the high end of guidance (8.5% YoY), 14% YoY cash flow growth, raised revenue and EPS guidance, aggressive share repurchases, and clear momentum from AI-driven modernization and product releases. Management highlighted measurable go-to-market improvements, higher-quality pipeline, and several displacement/customer wins across PLM, CAD, ALM and SLM. Offsetting these positives are familiar risks: macro uncertainty, comparability challenges from the divestiture, early-stage AI monetization (expected to ramp over time), and dependence on deferred ARR plus strong H2 execution to achieve full-year targets. Overall, the positives and concrete progress materially outweigh the listed risks, though several execution and macro caveats remain.Positive Updates
ARR Growth at High End of Guidance
Constant currency ARR (excl. Kepware and ThingWorx) reached $2.388 billion, up 8.5% year-over-year, reported at the high end of guidance.
Negative Updates
Macro Uncertainty and Approval Cycles
Management highlighted ongoing macro uncertainty and noted that complex customer approval cycles and legacy environments can slow adoption; deals still require lengthy approvals and executive sign-off in many cases.
Read all updates
Q2-2026 Updates
Positive
Negative
ARR Growth at High End of Guidance
Constant currency ARR (excl. Kepware and ThingWorx) reached $2.388 billion, up 8.5% year-over-year, reported at the high end of guidance.
Read all positive updates
Company Guidance
PTC reiterated and sharpened FY‑26 targets: constant‑currency ARR (ex‑Kepware/ThingWorx) was $2.388B at the end of Q2 (up 8.5% YoY) and management expects FY‑26 ARR growth of ~7.5%–9.5% (midpoint implying ~$195M net new ARR), with Q3 ARR growth of ~8%–9% (net new ARR $40M–$55M) and a meaningful step‑up in deferred ARR expected in Q4; FY‑26 free cash flow is guided to $850M (or $950M excluding four one‑time items that net to a $100M FY‑26 impact), Q3 FCF $240M–$245M, revenue raised to $2.58B–$2.82B and non‑GAAP EPS to $6.65–$8.90. Operationally Q2 operating cash flow and free cash flow each grew 14% YoY, and capital return plans include $250M repurchased in Q2, $375M net after‑tax divestiture proceeds deployed into an ASR, roughly $250M planned repurchases in Q3, expected FY repurchases of ~$1.225B–$1.325B, an anticipated diluted share count of ~115–116M (versus 120M in Q3 ’25), and a new $2B buyback authorization effective Oct 1, 2026 through FY‑28.PTC Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.00B | 2.74B | 2.30B | 2.10B | 1.93B | 1.81B |
| Gross Profit | 2.53B | 2.29B | 1.85B | 1.66B | 1.55B | 1.44B |
| EBITDA | 1.29B | 1.13B | 730.02M | 599.14M | 573.41M | 564.77M |
| Net Income | 1.25B | 734.00M | 376.33M | 245.54M | 313.08M | 476.92M |
Balance Sheet | ||||||
| Total Assets | 6.54B | 6.62B | 6.38B | 6.29B | 4.69B | 4.51B |
| Cash, Cash Equivalents and Short-Term Investments | 439.11M | 184.41M | 265.81M | 288.10M | 272.18M | 326.53M |
| Total Debt | 1.36B | 1.37B | 1.93B | 1.89B | 1.54B | 1.65B |
| Total Liabilities | 2.68B | 2.79B | 3.17B | 3.61B | 2.39B | 2.47B |
| Stockholders Equity | 3.86B | 3.83B | 3.21B | 2.68B | 2.30B | 2.04B |
Cash Flow | ||||||
| Free Cash Flow | 928.18M | 856.69M | 731.62M | 586.25M | 409.38M | 343.55M |
| Operating Cash Flow | 938.62M | 867.70M | 749.98M | 610.86M | 435.33M | 368.81M |
| Investing Cash Flow | 510.78M | -17.54M | -124.81M | -866.12M | -201.20M | -687.86M |
| Financing Cash Flow | -1.24B | -929.26M | -650.73M | 268.31M | -264.08M | 370.26M |
PTC Technical Analysis
Positive
139.74
Price Trends
142.38
Positive
151.92
Negative
173.21
Negative
Market Momentum
1.36
Negative
60.16
Neutral
81.54
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PTC, the sentiment is Positive. The current price of 139.74 is below the 20-day moving average (MA) of 141.73, below the 50-day MA of 142.38, and below the 200-day MA of 173.21, indicating a neutral trend. The MACD of 1.36 indicates Negative momentum. The RSI at 60.16 is Neutral, neither overbought nor oversold. The STOCH value of 81.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PTC.
PTC Risk Analysis
PTC disclosed 23 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $16.85B | 7.13 | 33.14% | ― | 27.75% | 187.41% | |
76 Outperform | $13.21B | 45.05 | 8.71% | ― | 8.68% | 8.27% | |
72 Outperform | $11.87B | 49.66 | 12.92% | ― | 23.72% | ― | |
71 Outperform | $10.00B | 67.32 | 16.91% | ― | 15.55% | 6.91% | |
68 Neutral | $10.16B | 98.40 | 5.02% | ― | 21.05% | ― | |
64 Neutral | $11.16B | -6.87 | -21.33% | ― | 7.55% | -39.50% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
PTC
PTC
148.23
-20.54
-12.17%
GWRE
Guidewire
140.26
-69.68
-33.19%
TYL
Tyler Technologies
313.25
-252.77
-44.66%
HUBS
HubSpot
201.97
-412.95
-67.16%
TTD
Trade Desk
22.38
-53.68
-70.58%
U
Unity Software
25.57
4.82
23.23%
PTC Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A Transactions
PTC Delivers Strong Q2 Results and Expands Buybacks
Positive
May 6, 2026
PTC reported strong results for its second fiscal quarter ended March 31, 2026, with revenue up 22% year on year, constant-currency ARR excluding divested businesses up 8.5%, and operating and free cash flow each rising 14%, while GAAP EPS was boo...
Business Operations and StrategyStock BuybackFinancial DisclosuresM&A Transactions
PTC Divests IoT Units and Launches Major Buyback
Positive
Mar 16, 2026
On March 16, 2026, PTC completed the previously announced sale of its Kepware industrial connectivity and ThingWorx IoT businesses to an affiliate of TPG for $523 million in cash, enabling the company to sharpen its strategic focus on its Intellig...
Executive/Board ChangesShareholder Meetings
PTC Shareholders Approve Directors, Pay and Auditor Oversight
Positive
Feb 11, 2026
At its annual meeting of shareholders held on February 11, 2026, PTC shareholders voted on the election of eight directors to serve until the 2027 annual meeting, an advisory say‑on‑pay resolution, and the ratification of the company&#...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.