PTC, a software company headquartered in Boston, garnered attention on Tuesday as investment firm Baird reaffirmed its Outperform rating. This decision was heavily influenced by positive feedback received from recent reseller interactions. Shares experienced a modest increase of 0.6% during mid-day trading.
Baird analyst Joe Vruwink analyzed feedback from nine partners and observed a “net” favorable performance against reseller plans. These findings align with trends witnessed in previous quarters. Vruwink maintains a price target of $210 for the stock.
Despite these favorable indications, Vruwink acknowledges the potential for lingering investor skepticism regarding ARR performance in the second half of 2024. However, he highlights that resellers are projecting a more robust environment and support for improved results during that period.
Vruwink further states, “Net, we continue to favor the investment opportunity as better 2H24 growth and likely upside to FCF emerge, juxtaposed against a reasonable valuation (26x FCF).”
Analysts anticipate PTC’s quarterly results to be released on May 10, following the close of trading. Vruwink anticipates that an “in-line” report could pose risks due to elevated expectations for new annual recurring revenue in 2024.
He adds, “Should this materialize and the stock experiences a pullback following Q2 2024 results, we recommend buying. Resellers are providing support for 2H24 strength, and analogous to FY23, stronger ARR in the second half could bolster results and sentiment.”
Consensus analyst estimates predict the company to generate $1.22 per share on revenue of $576.99 million.
