PTC (PTC) AI Stock Analysis

• Market Cap: $24.44B
• Dividend Yield: N/A
• Average Volume (3M): 831.54K
• Price to Earnings (P/E): 48.1
• Beta (1Y): 1.01
• Revenue Growth: 11.42%
• EPS Growth: 72.60%
• Country: US
• Employees: 7,512
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.64
• Shares Outstanding: 119,792,700
• 10 Day Avg. Volume: 855,490
• 30 Day Avg. Volume: 831,537
• PEG Ratio: 1.11
• Price to Book (P/B): 6.73
• Price to Sales (P/S): 9.41
• P/FCF Ratio: 29.39
• Enterprise Value/Market Cap: 0.90
• Enterprise Value/Revenue: 8.89
• Enterprise Value/Gross Profit: 10.82
• Enterprise Value/Ebitda: 25.53
• 1Y Price Target: $225.40
• Price Target Upside: 9.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 77 Outperform
• Price Target: $241.00 ▲(16.88% Upside)

PTC's strong financial performance and positive earnings call outlook are the most significant factors contributing to the stock's score. While the technical analysis supports a positive trend, the high valuation poses a risk. The company's strategic initiatives and resilience in demand bolster confidence in its long-term growth prospects.

Positive Factors

Revenue Growth

PTC's consistent ARR growth indicates strong demand for its software solutions, reflecting the company's ability to capture market share and drive sustainable revenue expansion.

Cash Flow Generation

Strong free cash flow growth enhances PTC's financial flexibility, enabling strategic investments, debt reduction, and shareholder returns, supporting long-term business stability.

Product Innovation

Innovative product enhancements, like AI-driven design, strengthen PTC's competitive edge, attracting new customers and retaining existing ones, fostering long-term growth.

Negative Factors

Macroeconomic Uncertainty

Macroeconomic uncertainties can impact customer purchasing decisions, potentially slowing revenue growth and affecting PTC's ability to forecast and plan effectively.

ServiceMax Churn

Churn in ServiceMax highlights potential vulnerabilities in customer retention, which could impact recurring revenue streams and necessitate increased customer acquisition efforts.

Slowing Revenue Growth

While revenue growth remains positive, the slowing rate compared to previous periods may signal challenges in maintaining momentum, impacting long-term growth prospects.

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 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 Money

PTC generates revenue primarily through software licensing, subscription services, and professional services. The company offers a range of software solutions that are sold as perpetual licenses or through subscription-based models, with recurring revenue being a significant component due to the increasing demand for cloud-based solutions. Key revenue streams include software maintenance and support services, which provide ongoing updates and technical assistance to customers. Additionally, PTC earns revenue from consulting and training services that help clients implement and optimize their software solutions. The company has established strategic partnerships with major technology firms and industry leaders, enhancing its market presence and contributing to its earnings through joint ventures and integrated solutions.

PTC Financial Statement Overview

Summary

PTC exhibits strong financial health with robust profitability, a solid balance sheet, and healthy cash flows. The company maintains high gross and net profit margins, a moderate debt-to-equity ratio, and strong cash flow metrics, supporting its financial flexibility and stability.

Income Statement

PTC's income statement shows strong profitability with a high gross profit margin of 82.16% and a net profit margin of 20.74% for TTM (Trailing-Twelve-Months). Revenue growth is steady at 5.34%, indicating consistent demand. EBIT and EBITDA margins are robust at 29.22% and 34.82%, respectively, reflecting efficient operations. The company has demonstrated consistent revenue growth over the years, although the growth rate has slowed compared to earlier periods.

Balance Sheet

The balance sheet reflects a solid financial position with a debt-to-equity ratio of 0.40, indicating moderate leverage. Return on equity is healthy at 15.37%, showcasing effective use of equity to generate profits. The equity ratio stands at 56.38%, suggesting a strong equity base relative to total assets. The company has improved its leverage position over the years, enhancing financial stability.

Cash Flow

PTC's cash flow statement reveals a positive trajectory with a free cash flow growth rate of 3.64% for TTM. The operating cash flow to net income ratio is 1.68, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is high at 98.61%, reflecting efficient conversion of earnings into cash. The company has consistently improved its cash flow metrics, supporting its financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.47B	2.30B	2.10B	1.93B	1.81B	1.46B
Gross Profit	2.03B	1.85B	1.66B	1.55B	1.44B	1.12B
EBITDA	860.64M	730.02M	599.14M	573.41M	564.77M	291.95M
Net Income	512.73M	376.33M	245.54M	313.08M	476.92M	130.69M
Balance Sheet
Total Assets	6.23B	6.38B	6.29B	4.69B	4.52B	3.38B
Cash, Cash Equivalents and Short-Term Investments	199.32M	265.81M	288.10M	272.18M	326.53M	303.59M
Total Debt	1.41B	1.93B	1.89B	1.54B	1.65B	1.22B
Total Liabilities	2.72B	3.17B	3.61B	2.39B	2.47B	1.94B
Stockholders Equity	3.51B	3.21B	2.68B	2.30B	2.04B	1.44B
Cash Flow
Free Cash Flow	849.78M	735.61M	586.25M	409.38M	343.55M	202.56M
Operating Cash Flow	861.78M	749.98M	610.86M	435.33M	368.81M	233.81M
Investing Cash Flow	-53.90M	-124.81M	-858.51M	-229.47M	-688.82M	-525.97M
Financing Cash Flow	-861.41M	-650.73M	260.71M	-235.82M	371.23M	297.41M

PTC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 206.19
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 206.19 is below the 20-day moving average (MA) of 210.18, below the 50-day MA of 206.61, and above the 200-day MA of 180.00, indicating a neutral trend. The MACD of -0.44 indicates Positive momentum. The RSI at 47.68 is Neutral, neither overbought nor oversold. The STOCH value of 21.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PTC.

PTC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PTC	77 Outperform	$24.44B	48.09	15.71%	―	11.42%	72.60%
TYL	71 Outperform	23.20B	75.80	8.44%	―	10.69%	45.43%
GWRE	68 Neutral	20.87B	308.80	4.79%	―	22.64%	0.00%
HUBS	65 Neutral	26.73B	-2,269.44	-0.58%	―	18.96%	58.78%
U	63 Neutral	19.25B	-42.68	-13.61%	―	-13.74%	48.10%
TTD	59 Neutral	22.18B	52.97	15.48%	―	23.18%	63.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%