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Parametric Technology Corporation
Technology Corporation or
“PTC” for short is in the business of helping discrete manufacturers
meeting their globalization, time-to-market, and operational efficiency
are a technology solution that
provides an engine, roadmap and more for companies in many industries
to bring new products to market cheaply and efficiently or improve
populations grow, economies
improve and we evolve as a culture it becomes more important for new
products that improve and economize our lives to make it to multiple
quickly and easily. PMTC provides solutions
and technologies to help make that happen.
Parametric Technology Corporation is a fast growing technology and
company that services a myriad of customers across all
At present, PTC services 27,000 customers around
the world from automotive to electronics to motorcycles, aircraft and
PTC consults with customers
on several levels in depth before they figure out how to improve their
open up bottlenecks and increase sales and profitability.
They offer everything from IT
consolidation, materials management and software solutions to warranty
and globalization and offer strategy for customers to compete in a
PTC also specializes in Multi-CAD
design which can help with creating product variables and tweaking
production and distribution in diverse markets. An example might be a
that is first designed for distribution in America, but the
to sell this car overseas where components and sources may be
steering wheel is on the other side, buyers want different options,
PTC will help design and manage those manufacturing
variables and get the product to market.
What interests me about PTC
is the fact that they are not only represented in just about every
market out there,
but they provide a service that is in demand in good and bad
When economies are slowing, companies want to
improve efficiency, cut costs and sell more stuff. In booming
economic times, meeting increased
demand may be at the top of the list. In
either scenario, PTC stands to benefit.
Of course, theory and
execution are two different things, but Parametric is still seeing year
PMTC is a mid-cap (3.15 billion) company that is trading at about 20.7
(expectations for next quarter) earnings. PMTC became a Zacks
Rank 1 strong
buy on January 31st, 2011.
Technology Corporation reported
a quarterly sales drop of 6% at their last earnings report and saw a
in EPS for the same period. Annual sales were up 15.5%
compared to (fiscal)
FY2010 with total sales of roughly 1.17 billion in FY2011.
earnings increased from $0.63 in
FY2010 to $0.88 in FY2011. They are expected to earn $1.28 in
FY2012 according to the Zacks Consensus Estimate.
Parametric guided 2012 earnings higher
than expectations during their last report.
The CEO noted “This year, in FY '12, we are again expecting to meet or
exceed our revenue growth goal of 12%, and we feel confident that we
expand margins by another 2 percentage points to take our margins to
profitability in 2011 and is expected to generate $0.27 in income this
when they report Q22012 results on April 25th.
saw strong Q12012 revenue that was
20% higher when compared to the year prior.
Parametric has surprised analysts to the upside 2 of the past 4
at an average of 1.89%.
the 9 analysts who cover PMTC,
the consensus is for the company to grow earnings by 46% in the current
(FY2012) and roughly 23% in FY2013.
In terms of the magnitude of
analyst estimate trends, we are seeing all of the consensus estimates
than they were 90 days ago for the current and next quarters as well as
Market Performance &
PMTC has had an interesting year. The
second half of 2011 proved to be a tough time for the stock, hitting a
$14.25 before building back in some support and then momentum in the
weakness shows susceptibility
to the broad market which coincides with its elevated beta of
That high beta could lead to a sharp move
lower if markets corrected.
good news is that the stock is
consolidating a bit at these levels and is forming some support right
$26. Below that are the 50 and 200 day
moving averages of $22.43 and $20.48 which will also be support
has exceeded the S&P 500’s
performance in the past year by 9% and outpaced it by over 15% in the
months during its recent rally. The
stock remains in a bullish trend and has maintained its momentum in the
leading the index by about 2%.
for a breakout of 2-5% above
the 52 week high of $57.75, if the stock can close above that level.
A Levy is the
Momentum Stock Strategist for Zacks.com. He is also the Editor in
charge of the
Whisper Trader Service.