PTC Jumps On Signs That Stability And Predictability Are Coming Back

PTC (PTC) has had a rough year, with the shares down about 18% on a year-to-date basis in what has been a pretty good year for software in general and comps/peers like Ansys (ANSS) and Dassault (OTCPK:DASTY). While I thought PTC’s valuation looked somewhat demanding going into a tricky macro environment for 2019, the company’s last three quarters have been quite choppy, with a series of bookings misses and worries about the company’s ability to translate “great interest” among customers in IoT and augmented reality (or AR) into actual bookings and revenue.

PTC’s fiscal fourth quarter wasn’t flawless, and the macro environment is still challenging, but it would seem that the business has stabilized relative to management’s expectations and sell-side forecasts. While I do still see some risk in 2020 from a weaker macro spending environment, I believe PTC can grow revenue at a roughly 10% annual rate and generate significant margin expansion, supporting a higher fair value and an attractive prospective return from here.

Read the full article here:
PTC Jumps On Signs That Stability And Predictability Are Coming Back