Results: PTC Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates
PTC Inc. (NASDAQ:PTC) just released its latest quarterly results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 11% higher than the analysts had forecast, at US$462m, while EPS were US$0.92 beating analyst models by 293%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on PTC after the latest results.
Check out our latest analysis for PTC
Taking into account the latest results, the consensus forecast from PTC's 15 analysts is for revenues of US$1.71b in 2021, which would reflect a reasonable 4.7% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plunge 49% to US$0.97 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.71b and earnings per share (EPS) of US$0.97 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$151. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic PTC analyst has a price target of US$167 per share, while the most pessimistic values it at US$88.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting PTC's growth to accelerate, with the forecast 9.6% annualised growth to the end of 2021 ranking favourably alongside historical growth of 6.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. So it's clear that despite the acceleration in growth, PTC is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that PTC's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on PTC. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple PTC analysts - going out to 2024, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for PTC that we have uncovered.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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