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PTC Stock Rises 52.6% in a Year: Will the Rally Continue?
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PTC Inc. (PTC - Free Report) witnessed healthy momentum in the past year. Shares of the company have gained 52.6% in the same time frame compared with the S&P 500 Composite’s growth of 31.2%.
PTC is a software provider offering a range of cutting-edge digital technologies that collectively revolutionize the engineering, production, and maintenance of tangible goods. The company offers a comprehensive portfolio of software solutions comprising computer-aided design (CAD) and product lifecycle management (PLM). The company’s software can be delivered on premises, in the cloud, or in a hybrid model.
PTC has an impressive earnings surprise history. The company has delivered an earnings surprise of 6.24%, on average. The stock has impressive long-term earnings per share (EPS) growth expectation of 16.1%.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #3 (Hold) stock.
PTC’s performance is gaining from solid momentum across the PLM and CAD business segments. In the fiscal first quarter, PLM revenues were $349 million, which rose 25% year over year. Windchill has been the main driver of organic growth in PLM, and Codebeamer has also contributed significantly to the increase in Application Lifecycle Management. However, for several quarters, the manufacturing PMIs have pointed to a weak overall demand environment.
CAD revenues were $202 million, up 8% year over year. The global 3D CAD software market is expected to reach $17.34 billion by 2030 at a CAGR of 6.7% between 2023 and 2030, per Grand View Research report. The industry is likely to benefit from the increasing use of 3D modeling and simulation across various industries and advancement in computer hardware, added the report.
Revenues for fiscal 2024 are projected to be in the range of $2.270-$2.360 billion, indicating a rise of 8-13% year over year. For fiscal 2024, ARR is expected to be in the range of $2.190-$2.250 billion, which indicates a rise of 11-14% year over year at constant currency.
For fiscal 2024, cash from operations is projected to be $745 million, indicating a rise of 22% on a year-over-year basis. The free cash flow is forecasted to be $725 million, suggesting a 23% increase year over year.
A Look at Estimates
The company’s earnings are expected to increase 14.3% and 25.6% on a year-over-year basis in fiscal 2024 and 2025, respectively.
PTC’s fiscal 2024 and 2025 revenues are anticipated to rise 10.4% and 13.6% year over year, respectively.
Few Headwinds
Apart from its solid fundamentals, the company is prone to a few risks. The company expects 2024 performance to suffer owing to the ongoing sluggish selling environment.
Leveraged balance sheets and escalated integration risks from frequent acquisitions are concerns. Stiff competition is an added headwind.
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has improved 1.1% in the past 60 days to $13.56. SNPS’ long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 4.1%. Shares of SNPS have risen 51.7% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.27. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 27.2%. Shares of WWD have risen 55% in the past year.
The Zacks Consensus Estimate for Perion Network’s fiscal 2024 EPS has improved 0.6% in the past 60 days to $3.34. PERI’s long-term earnings growth rate is 22%.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 12.9%. Shares of PERI have lost 34.2% in the past year.
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PTC Stock Rises 52.6% in a Year: Will the Rally Continue?
PTC Inc. (PTC - Free Report) witnessed healthy momentum in the past year. Shares of the company have gained 52.6% in the same time frame compared with the S&P 500 Composite’s growth of 31.2%.
PTC is a software provider offering a range of cutting-edge digital technologies that collectively revolutionize the engineering, production, and maintenance of tangible goods. The company offers a comprehensive portfolio of software solutions comprising computer-aided design (CAD) and product lifecycle management (PLM). The company’s software can be delivered on premises, in the cloud, or in a hybrid model.
PTC has an impressive earnings surprise history. The company has delivered an earnings surprise of 6.24%, on average. The stock has impressive long-term earnings per share (EPS) growth expectation of 16.1%.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #3 (Hold) stock.
PTC’s performance is gaining from solid momentum across the PLM and CAD business segments. In the fiscal first quarter, PLM revenues were $349 million, which rose 25% year over year. Windchill has been the main driver of organic growth in PLM, and Codebeamer has also contributed significantly to the increase in Application Lifecycle Management. However, for several quarters, the manufacturing PMIs have pointed to a weak overall demand environment.
CAD revenues were $202 million, up 8% year over year. The global 3D CAD software market is expected to reach $17.34 billion by 2030 at a CAGR of 6.7% between 2023 and 2030, per Grand View Research report. The industry is likely to benefit from the increasing use of 3D modeling and simulation across various industries and advancement in computer hardware, added the report.
Revenues for fiscal 2024 are projected to be in the range of $2.270-$2.360 billion, indicating a rise of 8-13% year over year. For fiscal 2024, ARR is expected to be in the range of $2.190-$2.250 billion, which indicates a rise of 11-14% year over year at constant currency.
For fiscal 2024, cash from operations is projected to be $745 million, indicating a rise of 22% on a year-over-year basis. The free cash flow is forecasted to be $725 million, suggesting a 23% increase year over year.
A Look at Estimates
The company’s earnings are expected to increase 14.3% and 25.6% on a year-over-year basis in fiscal 2024 and 2025, respectively.
PTC’s fiscal 2024 and 2025 revenues are anticipated to rise 10.4% and 13.6% year over year, respectively.
Few Headwinds
Apart from its solid fundamentals, the company is prone to a few risks. The company expects 2024 performance to suffer owing to the ongoing sluggish selling environment.
Leveraged balance sheets and escalated integration risks from frequent acquisitions are concerns. Stiff competition is an added headwind.
Stocks to Consider
Some better-ranked stocks from the broader technology space are Synopsys (SNPS - Free Report) , Woodward (WWD - Free Report) and Perion Network (PERI - Free Report) . Synopsys and Perion Network sport a Zacks Rank #1 (Strong Buy) at present, while Woodward carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Synopsys’ 2024 EPS has improved 1.1% in the past 60 days to $13.56. SNPS’ long-term earnings growth rate is 17.5%.
Synopsys’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 4.1%. Shares of SNPS have risen 51.7% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has inched up 5.7% in the past 60 days to $5.27. WWD’s long-term earnings growth rate is 15.5%.
Woodward’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, delivering an average surprise of 27.2%. Shares of WWD have risen 55% in the past year.
The Zacks Consensus Estimate for Perion Network’s fiscal 2024 EPS has improved 0.6% in the past 60 days to $3.34. PERI’s long-term earnings growth rate is 22%.
The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 12.9%. Shares of PERI have lost 34.2% in the past year.