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PTC (PTC)
NASDAQ:PTC
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PTC
(NASDAQ:PTC)
Rating:76Outperform
Price Target:
$182.00
▲(6.85%Upside)
Positive Factors
Acquisitions and Opportunities
The company's acquisition of ServiceMax should provide differentiation and longer-term opportunity to complete the digital thread to support asset-intensive industries.
Revenue and Earnings
PTC reported good F1Q25 results, with a ~2% beat on revenue and a $0.21 beat on EPS.
Software-as-a-Service Transition
PTC’s leadership in software-as-a-service transition and prospective share gains support a Buy rating.
Negative Factors
End Market Demand
PTC lowered its FY25 guidance for constant currency ARR growth due to significant deterioration in end market demand.
Foreign Exchange Impact
Unfavorable change in the FX environment presents the potential for a headwind this year.
Guidance and Demand
PTC management lowered FY25 ARR guidance to embed more caution about tariff and macro uncertainty.
PTC (PTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.43B
Dividend YieldN/A
Average Volume (3M)830.45K
Price to Earnings (P/E)46.8
Beta (1Y)1.13
Revenue Growth4.66%
EPS Growth51.72%
CountryUS
Employees7,512
SectorTechnology
Sector Strength83
IndustrySoftware - Application
Share Statistics
EPS (TTM)1.79
Shares Outstanding119,947,850
10 Day Avg. Volume737,497
30 Day Avg. Volume830,454
Financial Highlights & Ratios
PEG Ratio3.74
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio23.85
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue2.11
Enterprise Value/Gross Profit10.20
Enterprise Value/Ebitda6.86
Forecast
1Y Price Target
$183.57Price Target Upside7.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
PTC Business Overview & Revenue Model
Company DescriptionPTC Inc. is a global technology company that primarily operates in the software and technology sectors. It specializes in providing innovative solutions in computer-aided design (CAD), product lifecycle management (PLM), industrial Internet of Things (IoT), and augmented reality (AR). PTC's core products include Creo, a CAD software; Windchill, a PLM solution; and ThingWorx, an IoT platform, among others. These products are utilized across various industries, including manufacturing, aerospace, automotive, and healthcare, to enhance product development and operational efficiency.
How the Company Makes MoneyPTC Inc. generates revenue through a combination of software licensing, subscription-based services, and maintenance and support services. The company offers its software products through both perpetual licenses and subscription models, with a growing emphasis on recurring subscription revenues. Additionally, PTC provides professional services, including consulting, training, and implementation support, which contribute to its earnings. Strategic partnerships and collaborations with technology companies, as well as a strong global sales network, further support PTC's revenue growth by expanding its market reach and enhancing its product offerings.
PTC Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q2-2025)
| % Change Since: 9.92%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
PTC demonstrated solid financial performance and strategic advancements in its product portfolio, but macroeconomic uncertainties and potential impacts on customer behavior led to moderated ARR guidance. While the company remains confident in its long-term strategy, near-term caution is warranted.Q2-2025 Updates
Positive Updates
Solid Financial Performance in Q2
PTC delivered 10% ARR growth and 13% free cash flow growth year-over-year. The company also reduced its leverage ratio to 1.5x and continued share buybacks under a $2 billion authorization.
Strong Execution Across Key Focus Areas
PTC achieved significant customer wins and product expansions in PLM, ALM, SLM, CAD, and SaaS, including notable expansions with med tech and aerospace companies.
Advancements in Product Portfolio
PTC launched several AI initiatives, including Windchill AI, ServiceMax AI, and Onshape AI Advisor. The acquisition of IncQuery Labs is expected to accelerate the product roadmap in ALM and PLM.
Positive Outlook on Free Cash Flow
Despite macro uncertainties, PTC raised the low end of its free cash flow guidance for 2025, reflecting strong execution and profitability focus.
Negative Updates
Macroeconomic Uncertainty Impacting Guidance
PTC moderated its high end of ARR guidance to 9% growth due to growing uncertainty related to global trade dynamics and macroeconomic pressures, with potential for deals to be smaller, phased, or delayed.
Potential Risks in Customer Behavior
Customer conversations suggest that macro conditions could lead to smaller deal sizes or delays, particularly in industrial manufacturing and automotive segments.
Adjustment to ARR Guidance
PTC introduced a new low end of 7% to its ARR guidance range to account for potential worsening macroeconomic conditions affecting customer buying behaviors.
Company Guidance
During PTC's 2025 second quarter conference call, the company provided guidance reflecting a cautious outlook due to macroeconomic uncertainties. Despite delivering a strong quarter with 10% ARR growth and 13% free cash flow growth year-over-year, PTC moderated the high end of its ARR guidance to 9% growth, with a new low end of 7% to account for potential delays or downsizing of deals due to global trade dynamics. The company highlighted a strong performance across its five focus areas: PLM, ALM, SLM, CAD, and SaaS, with notable customer wins in various sectors. PTC also raised the low end of its free cash flow guidance for 2025, emphasizing strong execution and financial discipline. The company remains confident in its long-term growth prospects, driven by its digital transformation offerings and generative AI initiatives, but acknowledges the potential near-term impact of macroeconomic pressures on customer buying behavior.PTC Financial Statement Overview
Summary
PTC exhibits strong financial health with notable revenue and profit growth, efficient cost management, and robust cash flow generation. The balance sheet is stable with moderate leverage, supporting operational and strategic initiatives, but attention to debt levels and market conditions is essential.Income Statement
PTC demonstrates strong revenue growth with a TTM revenue of $2.35 billion, a 2.1% increase from the previous year. The gross profit margin is substantial at 80.7%, indicating efficient cost management. Net profit margin improved to 18.8%, reflecting profitability. EBIT and EBITDA margins are healthy at 26.8% and 31.8%, respectively, showcasing operational efficiency.85
Very Positive
Balance Sheet
The company's financial position is stable with a debt-to-equity ratio of 0.46, indicating moderate leverage. Return on Equity (ROE) is impressive at 13.0%, suggesting effective use of equity. The equity ratio stands at 55.0%, highlighting a strong equity base relative to assets, reducing financial risk.78
Positive
Cash Flow
PTC shows robust cash flow performance with a TTM free cash flow of $819.9 million, a 11.5% growth from the previous year. The operating cash flow to net income ratio is strong at 1.89, indicating efficient cash generation. Free cash flow to net income ratio is 1.86, demonstrating effective cash conversion.82
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.35B | 2.30B | 2.10B | 1.93B | 1.81B | 1.46B | Gross Profit |
| 1.89B | 1.85B | 1.66B | 1.55B | 1.44B | 1.12B | EBIT |
| 628.98M | 588.06M | 458.47M | 447.36M | 380.75M | 210.86M | EBITDA |
| 745.55M | 730.02M | 599.14M | 573.41M | 564.77M | 291.95M | Net Income Common Stockholders |
| 440.38M | 376.33M | 245.54M | 313.08M | 476.92M | 130.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 235.17M | 265.81M | 288.10M | 272.18M | 326.53M | 303.59M | Total Assets |
| 6.16B | 6.38B | 6.29B | 4.69B | 4.52B | 3.38B | Total Debt |
| 1.57B | 1.93B | 1.89B | 1.56B | 1.65B | 1.22B | Net Debt |
| 1.33B | 1.66B | 1.60B | 1.29B | 1.32B | 944.88M | Total Liabilities |
| 2.78B | 3.17B | 3.61B | 2.39B | 2.48B | 1.94B | Stockholders Equity |
| 3.39B | 3.21B | 2.68B | 2.30B | 2.04B | 1.44B |
| Cash Flow | Free Cash Flow | ||||
| 819.90M | 735.61M | 586.25M | 409.38M | 343.55M | 202.56M | Operating Cash Flow |
| 831.65M | 749.98M | 610.86M | 435.33M | 368.81M | 233.81M | Investing Cash Flow |
| 2.73M | -124.81M | -858.51M | -229.47M | -688.82M | -525.97M | Financing Cash Flow |
| -844.46M | -650.73M | 260.71M | -235.82M | 371.23M | 297.41M |
PTC Technical Analysis
Positive
170.34
Price Trends
158.38
Positive
164.82
Positive
174.84
Negative
Market Momentum
2.40
Positive
59.50
Neutral
58.02
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 170.34 is above the 20-day moving average (MA) of 169.54, above the 50-day MA of 158.38, and below the 200-day MA of 174.84, indicating a neutral trend. The MACD of 2.40 indicates Positive momentum. The RSI at 59.50 is Neutral, neither overbought nor oversold. The STOCH value of 58.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $24.31B | 24.13 | 12.19% | ― | 2.98% | 24.11% | |
78 Outperform | $19.89B | 25.11 | 12.34% | 1.23% | 6.92% | 28.43% | |
78 Outperform | $24.85B | 86.88 | 8.87% | ― | 9.96% | 50.93% | |
76 Outperform | $20.43B | 46.80 | 13.91% | ― | 4.66% | 51.72% | |
73 Outperform | $15.24B | 14.22 | 70.20% | ― | 7.85% | 935.80% | |
62 Neutral | $11.80B | 10.37 | -7.29% | 2.91% | 7.39% | -7.96% | |
59 Neutral | $21.53B | 649.49 | 2.61% | ― | 18.61% | ― |
* Technology Sector Average
Performance Comparison
PTC
PTC
170.34
-5.20
-2.96%
GWRE
Guidewire
255.77
123.56
93.46%
SSNC
SS&C Technologies Holdings
80.64
19.69
32.31%
TYL
Tyler Technologies
576.22
99.20
20.80%
DOCU
DocuSign
75.28
24.29
47.64%
ZM
Zoom Video Communications
80.35
17.39
27.62%
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.