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PTC Inc (PTC) to Announce Q1 Earnings: What's in the Offing?

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·4 min read
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PTC Inc. PTC is scheduled to report first-quarter fiscal 2021 results on Jan 27.

The Zacks Consensus Estimate for first-quarter revenues is pegged at $383.1 million, which suggests year-over-year growth of 7.6%. Moreover, the consensus mark for earnings has been steady at 67 cents, indicating an improvement of 17.5% year over year.

Notably, the company has a trailing four-quarter earnings surprise of 33%, on average.

PTC Inc. Price and EPS Surprise

 

PTC Inc. Price and EPS Surprise
PTC Inc. Price and EPS Surprise

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

 

PTC reported fourth-quarter fiscal 2020 non-GAAP earnings of 78 cents per share, beating the Zacks Consensus Estimate by 39.3%. The bottom line increased 21.9% on a year-over-year basis.

Revenues came in at $391 million, which beat the Zacks Consensus Estimate by 9.85% and increased 16.7% year over year.

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 momentum in industrial Internet of things (IoT) and AR bookings as well as strong demand for product lifecycle management (PLM) solutions in the fiscal first quarter. Strong momentum can be attributed to the COVID-19 induced digital transformation in the industrial space.

PTC is also working on improving its digital sales and marketing capabilities, which is expected to have had a positive impact on the top line in the fiscal first quarter. Further, the transition to a subscription business model from a perpetual license model is expected to have driven recurring revenue growth.

Particularly, robust adoption of the Vuforia-Chalk and Vuforia Expert Capture solution is expected to have generated incremental revenues in the first quarter.

Also, 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.

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

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

Development in Q1

In December 2020, PTC announced buyout of Arena Solutions, Inc for $715 million. The acquisition of Arena Solutions is aimed at capturing a bigger share of the software as a service (SaaS)-based product development market, especially among midmarket customers. PTC concluded the acquisition in January 2021.

Arena Solutions is a privately-held company that specializes in providing cloud-based SaaS PLM applications solutions and product-centric quality management system (QMS) solutions.

What Our Model Says

Our proven model predicts 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.

PTC has a Zacks Rank #3 and an Earnings ESP of 3.24%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

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

Qorvo QRVO has an Earnings ESP of +0.78% and holds a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics Incorporated SYNA has an Earnings ESP of +1.42% and currently carries a Zacks Rank of 2.

Skyworks SWKS has an Earnings ESP of +1.02% and a Zacks Rank of 2.

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