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PTC Stock Surges 30% in a Year: Will the Momentum Continue?
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PTC Inc’s (PTC - Free Report) shares have been performing well on the trading front, with a gain of 30.2% year to date compared with the S&P 500 composite's growth of 24%.
PTC is a software provider offering a comprehensive portfolio of software, including computer-aided design (CAD) and product lifecycle management (PLM) solutions. The company’s software can be delivered on-premises, in the cloud or in a hybrid model.
Evaluating Growth Catalysts
Solid financial performance has been driving a good run on the trading front. PTC outpaced estimates in three of the trailing four quarters while missing the other. It has an average positive earnings surprise of 8.8%.
Image Source: Zacks Investment Research
PTC is directing much attention toward the software-as-a-service transition. Cash flow is being driven by the resilience of the subscription license business model and operational discipline.
The company is also focusing on the Service Lifecycle Management (SLM) segment, which is primarily being driven by ServiceMax. Acquired in January 2023, ServiceMax is a cloud-based field service management (FSM) software company. It provides FSM services built on the Salesforce platform, which includes all information about serviced products like description, serial number, service history and scheduling and dispatching technicians, etc. PTC is looking to cross-sell ServiceMax’s SLM into its customer base.
Codebeamer has also contributed significantly to the increase in Application Lifecycle Management (ALM) business. Further, the acquisition of pure-systems (especially pure: variants solutions) complements Codebeamer and strengthens the company’s position in the rapidly growing ALM market.
Continued momentum across the PLM and CAD business segments, especially Windchill PLM and Creo products, remains a steady growth driver. In the fiscal second quarter, PLM revenues were $373 million, which was up 8% year over year. CAD revenues were $230 million, which was up 16% year over year.
Forex Volatility a Concern
PTC has lowered the 2024 revenue guidance due to the negative impact of forex. The company now expects 2024 revenues in the range of $2.27-$2.34 billion compared with the previous guidance of $2.27-$2.36 billion.
Stiff competition in the PLM and CAD spaces remains an additional headwind for this Zacks Rank #3 (Hold) stock.
For fiscal 2024, the annual run rate is expected in the range of $2.2-$2.24 billion, which indicates a rise of 11-13% year over year.
For 2024, cash from operations is anticipated at $745 million, which indicates a rise of 22% on a year-over-year basis. The free cash flow is forecast at $725 million, suggesting a 23% increase year over year.
Estimate Revision Activity
The Zacks Consensus Estimate for PTC’s fiscal 2024 and 2025 revenues is pegged at $2.3 billion and $2.6 billion, respectively, which indicates growth of 9.8% and 12.8% from the year-ago levels.
The consensus estimate for fiscal 2024 and 2025 EPS is expected to rise 13.6% and 23.6%, respectively, from the prior-year actuals to $4.93 and $6.09. The consensus estimate for EPS for fiscal 2024 and 2025 has remained unchanged in the past 60 days.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 EPS is pegged at $2.68. NVIDIA’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 18.4%. The long-term earnings growth rate is 37.6%. Shares of NVDA have risen 187.8% in the past year.
The Zacks Consensus Estimate for Onto Innovation’s 2024 EPS is pegged at $5.05, unchanged in the past 30 days. ONTO’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missing the other, the average surprise being 2.6%. Shares of ONTO have gained 93.4% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has remained unchanged in the past 30 days at $5.88. WWD’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 26.1%. The long-term earnings growth rate is 16.5%. Shares of WWD have risen 45.5% in the past year.
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PTC Stock Surges 30% in a Year: Will the Momentum Continue?
PTC Inc’s (PTC - Free Report) shares have been performing well on the trading front, with a gain of 30.2% year to date compared with the S&P 500 composite's growth of 24%.
PTC is a software provider offering a comprehensive portfolio of software, including computer-aided design (CAD) and product lifecycle management (PLM) solutions. The company’s software can be delivered on-premises, in the cloud or in a hybrid model.
Evaluating Growth Catalysts
Solid financial performance has been driving a good run on the trading front. PTC outpaced estimates in three of the trailing four quarters while missing the other. It has an average positive earnings surprise of 8.8%.
Image Source: Zacks Investment Research
PTC is directing much attention toward the software-as-a-service transition. Cash flow is being driven by the resilience of the subscription license business model and operational discipline.
The company is also focusing on the Service Lifecycle Management (SLM) segment, which is primarily being driven by ServiceMax. Acquired in January 2023, ServiceMax is a cloud-based field service management (FSM) software company. It provides FSM services built on the Salesforce platform, which includes all information about serviced products like description, serial number, service history and scheduling and dispatching technicians, etc. PTC is looking to cross-sell ServiceMax’s SLM into its customer base.
Codebeamer has also contributed significantly to the increase in Application Lifecycle Management (ALM) business. Further, the acquisition of pure-systems (especially pure: variants solutions) complements Codebeamer and strengthens the company’s position in the rapidly growing ALM market.
Continued momentum across the PLM and CAD business segments, especially Windchill PLM and Creo products, remains a steady growth driver. In the fiscal second quarter, PLM revenues were $373 million, which was up 8% year over year. CAD revenues were $230 million, which was up 16% year over year.
Forex Volatility a Concern
PTC has lowered the 2024 revenue guidance due to the negative impact of forex. The company now expects 2024 revenues in the range of $2.27-$2.34 billion compared with the previous guidance of $2.27-$2.36 billion.
Stiff competition in the PLM and CAD spaces remains an additional headwind for this Zacks Rank #3 (Hold) stock.
For fiscal 2024, the annual run rate is expected in the range of $2.2-$2.24 billion, which indicates a rise of 11-13% year over year.
For 2024, cash from operations is anticipated at $745 million, which indicates a rise of 22% on a year-over-year basis. The free cash flow is forecast at $725 million, suggesting a 23% increase year over year.
Estimate Revision Activity
The Zacks Consensus Estimate for PTC’s fiscal 2024 and 2025 revenues is pegged at $2.3 billion and $2.6 billion, respectively, which indicates growth of 9.8% and 12.8% from the year-ago levels.
The consensus estimate for fiscal 2024 and 2025 EPS is expected to rise 13.6% and 23.6%, respectively, from the prior-year actuals to $4.93 and $6.09. The consensus estimate for EPS for fiscal 2024 and 2025 has remained unchanged in the past 60 days.
The long-term earnings growth rate is 15.3%.
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are NVIDIA Corporation (NVDA - Free Report) , Onto Innovation (ONTO - Free Report) and Woodward (WWD - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 EPS is pegged at $2.68. NVIDIA’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 18.4%. The long-term earnings growth rate is 37.6%. Shares of NVDA have risen 187.8% in the past year.
The Zacks Consensus Estimate for Onto Innovation’s 2024 EPS is pegged at $5.05, unchanged in the past 30 days. ONTO’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missing the other, the average surprise being 2.6%. Shares of ONTO have gained 93.4% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2024 EPS has remained unchanged in the past 30 days at $5.88. WWD’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 26.1%. The long-term earnings growth rate is 16.5%. Shares of WWD have risen 45.5% in the past year.