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PTC Q3 Earnings to be Hit by Rising Subscription Bookings Mix
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PTC Inc. (PTC - Free Report) is set to report third-quarter fiscal 2018 results on Jul 18.
In the last reported quarter, the company’s adjusted earnings of 34 cents per share surpassed the Zacks Consensus Estimate by three cents. Notably, PTC has beaten the Zacks Consensus Estimate in three of the trailing four quarters, with a positive average earnings surprise of 1.23%.
Notably, PTC’s top line also outpaced the consensus mark in three of the trailing four quarters. In the last quarter, non-GAAP revenues came in at $308.2 million, beating the Zacks Consensus Estimate of $303 million and increased 9.8% from the year-ago quarter.
Management anticipates third-quarter fiscal 2018 revenues between $310 million and $315 million, while adjusted earnings between 30 cents and 34 cents per share.
The Zacks Consensus Estimate for earnings and revenues are currently pegged at 32 cents and $313 million, respectively.
Let’s see how things are shaping up prior to this announcement.
PTC has been placed at the “Visionaries” quadrant by market research firm, Gartner, in its latest Magic Quadrant for Industrial IoT Platforms. The recognition reflects the company’s portfolio strength, expanding partner base and solid clientele.
PTC’s top line is expected to benefit from strong CAD and IoT bookings. Further, improving macro-economic conditions, particularly in the industrial sector, is expected to drive demand for the company’s products in mature markets like CAD and PLM. Geographically, PTC expects bookings to increase in Europe, driven by strong large-deal pipeline.
Moreover, increasing recurring software revenue base (90% in the last reported quarter) is positive. The transition to subscription business model from a perpetual license model is further expected to drive recurring revenue growth.
Notably, PTC’s ThingWorx continues to gain rapid adoption with the customers like Exxon Mobile and Airbus. The company’s strengthening footprint in IoT driven “Industrie 4.0” factory automation is a major growth driver.
Additionally, strategic partnership with Microsoft (MSFT - Free Report) that combines ThingWorx and Azure IoT is helping PTC win new contracts.
However, a higher mix of subscription bookings is likely to hurt revenues in the going-to-be reported quarter. Further, increasing operating expenses due to LiveWorx and commissions are expected to hurt operating margin expansion.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
PTC has a Zacks Rank #3 and an Earnings ESP of -2.58%, which indicates an unlikely positive surprise. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Stocks to Consider
Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
NetApp (NTAP - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #1.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
PTC Q3 Earnings to be Hit by Rising Subscription Bookings Mix
PTC Inc. (PTC - Free Report) is set to report third-quarter fiscal 2018 results on Jul 18.
In the last reported quarter, the company’s adjusted earnings of 34 cents per share surpassed the Zacks Consensus Estimate by three cents. Notably, PTC has beaten the Zacks Consensus Estimate in three of the trailing four quarters, with a positive average earnings surprise of 1.23%.
Notably, PTC’s top line also outpaced the consensus mark in three of the trailing four quarters. In the last quarter, non-GAAP revenues came in at $308.2 million, beating the Zacks Consensus Estimate of $303 million and increased 9.8% from the year-ago quarter.
Management anticipates third-quarter fiscal 2018 revenues between $310 million and $315 million, while adjusted earnings between 30 cents and 34 cents per share.
The Zacks Consensus Estimate for earnings and revenues are currently pegged at 32 cents and $313 million, respectively.
Let’s see how things are shaping up prior to this announcement.
PTC Inc. Price and EPS Surprise
PTC Inc. Price and EPS Surprise | PTC Inc. Quote
Solid Bookings & Recurring Revenues Key Catalysts
PTC has been placed at the “Visionaries” quadrant by market research firm, Gartner, in its latest Magic Quadrant for Industrial IoT Platforms. The recognition reflects the company’s portfolio strength, expanding partner base and solid clientele.
PTC’s top line is expected to benefit from strong CAD and IoT bookings. Further, improving macro-economic conditions, particularly in the industrial sector, is expected to drive demand for the company’s products in mature markets like CAD and PLM. Geographically, PTC expects bookings to increase in Europe, driven by strong large-deal pipeline.
Moreover, increasing recurring software revenue base (90% in the last reported quarter) is positive. The transition to subscription business model from a perpetual license model is further expected to drive recurring revenue growth.
Notably, PTC’s ThingWorx continues to gain rapid adoption with the customers like Exxon Mobile and Airbus. The company’s strengthening footprint in IoT driven “Industrie 4.0” factory automation is a major growth driver.
Additionally, strategic partnership with Microsoft (MSFT - Free Report) that combines ThingWorx and Azure IoT is helping PTC win new contracts.
However, a higher mix of subscription bookings is likely to hurt revenues in the going-to-be reported quarter. Further, increasing operating expenses due to LiveWorx and commissions are expected to hurt operating margin expansion.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
PTC has a Zacks Rank #3 and an Earnings ESP of -2.58%, which indicates an unlikely positive surprise. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Stocks to Consider
Here are few stocks you may consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
Twitter has an Earnings ESP of +7.06% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
NetApp (NTAP - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #1.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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