Research

PTC – Market expectations are for record Uniform ROA, but management may be concerned about growth, guidance, and their strategy

  • PTC Inc. (PTC:USA) currently trades well above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 33.8x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about growth, meeting guidance, and their sales strategy
  • Specifically, management may be concerned about the sustainability of recent bookings growth headwinds, and may lack confidence in their ability to generate value for their customers and shareholders. Furthermore, they may be exaggerating the value of their AR products, and may be downplaying the impact VPA renewals and conversions has on their CAD and PLM business. Additionally, they may lack confidence in their ability to meet their EPS, revenue, and free cash flow guidance. Finally, they may lack confidence in their ability to transition to a recurring revenue software strategy, and may be concerned about the sustainability of their operating margin growth.