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PTC Inc (PTC) to Report Q2 Earnings: What's in the Cards?

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PTC Inc. (PTC - Free Report) is scheduled to report second-quarter fiscal 2021 results on Apr 28.

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $418.5 million, which suggests year-over-year growth of 16.4%. Moreover, the consensus mark for earnings has been steady at 72 cents that indicates an improvement of 22.03% year over year.

Notably, the company has a trailing four-quarter earnings surprise of 37.53%, on average.

PTC reported first-quarter fiscal 2021 non-GAAP earnings of 97 cents per share, up 70.1% on a year-over-year basis. Also, the bottom line beat the Zacks Consensus Estimate by 44.8%.

PTC Inc. Price and EPS Surprise

 

PTC Inc. Price and EPS Surprise

PTC Inc. price-eps-surprise | PTC Inc. Quote

 

Revenues came in at $429.1 million, up 20.5% year over year. The upside was driven by strength across Core and Growth product groups. The top line surpassed the Zacks Consensus Estimate by 12%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

PTC’s top line is expected to have benefited from steady traction in bookings owing to the COVID-19 induced digital transformation wave in the industrial space. Also, continued momentum in industrial Internet of things (IoT) as well as strong demand for product lifecycle management (PLM) solutions is likely to have aided top-line performance in the fiscal second quarter.

Further, the transition to a subscription business model from a perpetual license model is expected to have driven recurring revenue growth.

New deal wins on the back of synergies from alliances with ANSYS, Rockwell Automation and Microsoft are expected to have driven revenues in the quarter under review.

Also, the acquisition (concluded in January 2021) of Arena Solutions is expected to have aided top-line growth in the about to-be-reported quarter. Arena Solutions’ takeover is aiding PTC in providing its customers with a comprehensive SaaS solution that encompasses both CAD and PLM offerings. Arena Solutions’ buyout complements PTC’s earlier acquisition of Onshape.

Growing clout of ThingWorx and Windchill platforms as well as Onshape suite is likely to have contributed to the top line in the to-be-reported quarter. Onshape’s school-from-home CAD solution is likely to have witnessed healthy uptake in the education vertical due to rise in online learning triggered by the pandemic.

Also, strong uptake of the Vuforia-Chalk and Vuforia Expert Capture solution is expected to have generated incremental revenues in the fiscal second quarter.

However, exposure to verticals like airlines and retail that are hit hard by the ongoing pandemic, might have limited top-line growth for PTC’s Focused Solutions Group in the fiscal second quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for PTC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

PTC has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:

Texas Instruments (TXN - Free Report) has an Earnings ESP of +4.25% and holds a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet (AVT - Free Report) has an Earnings ESP of +0.89% and currently carries a Zacks Rank of 2.

Sirius XM Holdings (SIRI - Free Report) has an Earnings ESP of +12.9% and a Zacks Rank of 2.

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