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PTC Stock Gains 46.5% YTD: Will the Upward Trend Continue?
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PTC Inc (PTC - Free Report) witnessed healthy momentum this year so far. Shares of the company have gained 46.5% in the same time frame compared with the S&P 500 Composite’s growth of 25.1%.
PTC provides software solutions and services globally that aid manufacturing companies to design, operate and manage products. The company offers a comprehensive portfolio of software solutions comprising computer-aided design (CAD) modeling, product lifecycle management (PLM), data orchestration and experience creation products.
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.
The company benefits from increasing adoption of its major technology platforms, including the 3D modeling (CAD) offering; Creo, lifecycle management (PLM) solution; Windchill, data orchestration offering. The global 3D CAD software market is set to reach $17.34 billion by 2030 at a CAGR of 6.7% between 2023 and 2030, per Grand View Research report.
Increasing spending by enterprises on emerging categories like IoT and AR/VR presents significant prospects for PTC. Per Mordor Intelligence data, the global IoT market is anticipated to witness a CAGR of 25.33% between 2023 and 2028.
Going ahead, the acquisition of Pure Systems will strengthen the company’s position in the rapidly growing Application Lifecycle Management market. Continued momentum in Onshape and Arena will further assist the company in the software-as-a-service transition.
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.
PTC has an impressive earnings surprise history. The company has delivered an earnings surprise of 2.43%, on average. The stock has impressive long-term earnings per share (EPS) growth expectation of 14.1%
PTC has an average brokerage recommendation (ABR) of 1.41 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock.
A Look at Estimates
The company’s earnings are expected to increase 11.8% and 25.1% on a year-over-year basis in fiscal 2024 and 2025, respectively.
PTC’s fiscal 2024 and 2025 revenues are anticipated to rise 10.3% and 12.3% year over year, respectively.
Few Headwinds
Apart from its solid fundamentals, the company is prone to a few risks. The company expects professional services revenues to decrease in fiscal 2024 due to the company’s strategy to transfer some of its professional services to DXP services.
Leveraged balance sheets and escalated integration risks from frequent acquisitions are concerns. Stiff competition is an added headwind.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has inched up 1.8% in the past 60 days to $3.86. BLKB’s long-term earnings growth rate is 23.4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have gained 49% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR lost 17% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 3.9% in the past 60 days to $8.08.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have soared 42.5% in the past year.
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PTC Stock Gains 46.5% YTD: Will the Upward Trend Continue?
PTC Inc (PTC - Free Report) witnessed healthy momentum this year so far. Shares of the company have gained 46.5% in the same time frame compared with the S&P 500 Composite’s growth of 25.1%.
PTC provides software solutions and services globally that aid manufacturing companies to design, operate and manage products. The company offers a comprehensive portfolio of software solutions comprising computer-aided design (CAD) modeling, product lifecycle management (PLM), data orchestration and experience creation products.
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.
The company benefits from increasing adoption of its major technology platforms, including the 3D modeling (CAD) offering; Creo, lifecycle management (PLM) solution; Windchill, data orchestration offering. The global 3D CAD software market is set to reach $17.34 billion by 2030 at a CAGR of 6.7% between 2023 and 2030, per Grand View Research report.
Increasing spending by enterprises on emerging categories like IoT and AR/VR presents significant prospects for PTC. Per Mordor Intelligence data, the global IoT market is anticipated to witness a CAGR of 25.33% between 2023 and 2028.
Going ahead, the acquisition of Pure Systems will strengthen the company’s position in the rapidly growing Application Lifecycle Management market. Continued momentum in Onshape and Arena will further assist the company in the software-as-a-service transition.
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.
PTC has an impressive earnings surprise history. The company has delivered an earnings surprise of 2.43%, on average. The stock has impressive long-term earnings per share (EPS) growth expectation of 14.1%
PTC has an average brokerage recommendation (ABR) of 1.41 on a scale of 1 to 5 (Strong Buy to Strong Sell). ABR is the calculated average of actual recommendations made by brokerage firms and portends the future potential of the stock.
A Look at Estimates
The company’s earnings are expected to increase 11.8% and 25.1% on a year-over-year basis in fiscal 2024 and 2025, respectively.
PTC’s fiscal 2024 and 2025 revenues are anticipated to rise 10.3% and 12.3% year over year, respectively.
Few Headwinds
Apart from its solid fundamentals, the company is prone to a few risks. The company expects professional services revenues to decrease in fiscal 2024 due to the company’s strategy to transfer some of its professional services to DXP services.
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 worth considering in the broader technology space are Blackbaud (BLKB - Free Report) , NETGEAR (NTGR - Free Report) and Watts Water Technologies (WTS - Free Report) . Watts Water Technologies sports a Zacks Rank #1 (Strong Buy), while Blackbaud and NETGEAR carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has inched up 1.8% in the past 60 days to $3.86. BLKB’s long-term earnings growth rate is 23.4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have gained 49% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR lost 17% in the past year.
The Zacks Consensus Estimate for Watts Water Technologies 2023 EPS has improved 3.9% in the past 60 days to $8.08.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have soared 42.5% in the past year.