PTC Set to Report Q4 Earnings: Here's What You Should Know
PTC Inc PTC is slated to report fourth-quarter fiscal 2023 results on Nov 1.
The Zacks Consensus Estimate for revenues is pegged at $559.3 million, suggesting growth of 10.1% from a year ago. The consensus estimate for earnings is pegged at $1.14 per share, indicating a year-over-year decline of 10.2%.
The company has a trailing four-quarter earnings surprise of 3.96%, on average.
PTC Inc. Price and EPS Surprise
PTC Inc. price-eps-surprise | PTC Inc. Quote
Factors to Consider
Increasing demand for products, especially digital transformation and software-as-a-service or SaaS, across all segments and regions is expected to have driven PTC’s revenue performance in the to-be-reported quarter.
Continued momentum in Onshape and Arena will further assist the company in the SaaS transition. Strength in the industrial Internet of Things solutions, and healthy demand for product lifecycle management (PLM) and computer-aided design solutions are expected to have contributed to PTC’s fiscal fourth-quarter top line. A strong uptick in demand for Creo, Windchill platforms and ThingWorx DPM is likely to have acted as a tailwind.
Subscription-centric model and disciplined operational management are likely to have favored its overall performance. The Zacks Consensus Estimate for Recurring revenues is pegged at $516 million, implying an 11.4% rise on a year-over-year basis.
Synergies from the recent buyouts of ServiceMax are likely to have aided the company's performance. In January 2023, PTC completed the acquisition of ServiceMax, a cloud-based field service management (FSM) software company, for $1.46 billion. It expects this integration to strengthen its closed-loop PLM solutions. This will provide enterprise asset management and FSM companies with monitoring and servicing product record after the product moves into customer use.
For the fiscal fourth quarter, PTC expects ARR to be between $1.935 billion and $1.950 billion. Cash from operations is projected to be $44 million. Free cash flow is forecast to be $42 million. Its margins are likely to benefit owing to a shift from professional services to software.
However, inflation and a challenging global macroeconomic environment, especially softness in bookings from China, are expected to have weighed on the company’s performance. Also, increasing research and development costs to fend off competition are likely to have acted as headwinds.
Recent Development
In October 2023, PTC acquired a leading provider of solutions for managing product and software variants — pure-systems. The acquisition will help PTC to address the demand for manufacturers' software variant management.
It will also strengthen PTC's position in the rapidly growing Application Lifecycle Management market, especially benefiting industries like automotive, aerospace and medical devices that prioritize software in their product designs.
What Our Model Says
Our proven model does not 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.
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 a few stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Itron ITRI has an Earnings ESP of +23.18% and currently flaunts a Zacks Rank of 1. ITRI is set to announce quarterly figures on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ITRI’s to-be-reported quarter’s earnings and revenues is pegged at 51 cents per share and $540.8 million, respectively. Shares of ITRI have gained 17% in the past year.
CDW Corporation CDW has an Earnings ESP of +0.17% and presently carries a Zacks Rank #3. CDW is slated to release quarterly numbers on Nov 1.
The Zacks Consensus Estimate for CDW’s to-be-reported quarter’s earnings and revenues is pegged at $2.59 per share and $5.82 billion, respectively. Shares of CDW have increased 15.1% in the past year.
GoDaddy Inc GDDY has an Earnings ESP of +8.11% and currently sports a Zacks Rank #1. GDDY is scheduled to report quarterly earnings on Nov 2.
The Zacks Consensus Estimate for GDDY’s to-be-reported quarter’s earnings and revenues is pegged at 71 cents per share and $1.06 billion, respectively. Shares of GDDY have plunged 10.9% in the past year.
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