10Y annualized return is
very good
at 14.0% per year
PTC has met or exceeded earnings expectations in
the majority of
recent quarters (8/10)
Strong Gross Profit Margin
Strong Operating Profit Margin
Solid Return on Equity
Manageable Debt Levels
Strong Interest Coverage
🏆 Strong Business Model
🔑 Competitive Advantages
📈 Go-to-Market Transformation
🚀 Innovation Potential with AI
📊 Growth in Key Verticals
High Price-to-Earnings Ratio
Elevated Enterprise Value to EBITDA Ratio
Low Net Profit Margin
Liquidity Concerns
📉 Sluggish Selling Environment
⏳ Back-Loaded Growth Expectations
Overall, PTC displays a solid business model with strong competitive advantages and early signs of effective transformation in their go-to-market strategy. However, they face challenges due to a sluggish selling environment and back-loaded growth expectations. The integration of AI into their product offerings presents significant innovation potential and growth opportunities in targeted verticals.
Analysis Date: February 5, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
PTC Inc. is a company that creates software to help other businesses improve how they operate. They offer tools that allow companies to design products, manage their development, and work together more effectively, no matter where they are. Some of their main products include software for creating 3D designs, collaborating on projects, and managing product information. Overall, PTC helps businesses become more efficient and innovative by using technology.
Streams of revenue
Geographic Distribution
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$125.57
Current Market Price: $139.86
IV/P Ratio: 0.90x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-11.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for PTC
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (42.85)
P/B ratio ≤ 1.5 (5.20)
Current ratio ≥ 2.0 (0.69x)
Long-term debt < Net current assets (-2.46x)
Margin of safety (-11.0%)
PTC does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
12.65%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
79.78%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
16.95%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The operating profit margin of 25.30% reflects effective cost management and strong pricing power, indicating the company retains a good portion of revenue as profit.
PTC's return on equity (ROE) is 12.65%, which signifies effective use of equity capital to generate profits, indicating good management performance.
The net profit margin of 16.95% may suggest that, while revenues are healthy, there is room for improvement in controlling expenses and maximizing earnings.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.53x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q1 2025
Current Ratio
Current assets divided by current liabilities
0.69x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q1 2025
PTC has a debt-to-equity ratio of 0.53, indicating that the company has a relatively low level of debt compared to its equity, which suggests a safer financial structure.
With an interest coverage ratio of 5.50, the company generates enough earnings to cover its interest expenses, demonstrating good financial health.
The current and quick ratios are both below 1 (0.69), suggesting potential liquidity issues, which could hinder short-term obligations.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Revenue
PTC operates a diversified business model with a focus on subscription services, which provides predictable cash inflows and supports a resilient revenue stream. Their constant currency ARR grew by 11% year-over-year, demonstrating strong customer retention and low churn rates.
PTC has strong competitive positioning with key products like Windchill and Codebeamer that support digital transformation in industries. This is highlighted by their ability to cross-sell products effectively, as seen in their success with medtech customers leveraging both Windchill and Codebeamer.
The recent restructuring of the go-to-market organization is showing early promise. The verticalization of their approach aims to enhance customer engagement and align with industry-specific needs, potentially driving higher growth in the long term.
The company continues to face a challenging macroeconomic environment which has impacted sales cycles and close rates. This sluggishness has been a consistent theme affecting their performance in recent quarters.
PTC is focusing on integrating AI into their product offerings, which is expected to enhance product capabilities and customer workflows. The upcoming launches of AI features in ServiceMax and Codebeamer highlight their commitment to leveraging AI for competitive advantage.
The company is positioned to capitalize on growth opportunities in verticals such as medtech, aerospace, and automotive by expanding the use of their PLM and ALM solutions. The restructuring efforts aim to align their offerings with customer needs in these sectors.
The company anticipates a back-loaded year for ARR growth, indicating potential challenges in achieving consistent growth throughout fiscal 2025. This raises concerns about the timing of the benefits from their go-to-market changes.
Insider trading data shows purchase and sale activities by company executives and board members.
Insider trading patterns can provide insights into how company executives and board members view the stock's future prospects.
Insiders are buying significantly more than selling (ratio: 1.71x)
Total Bought
Total value of insider purchases in recent quarters
$301733
Higher values indicate stronger insider confidence
Total Sold
Total value of insider sales in recent quarters
$175961
Lower values relative to buying indicate possible undervaluation
Active Insiders
Number of insiders trading in recent quarters
16
High insider activity
Recent Trend
Change in insider trading pattern
PTC: No trend data available