PTC – Unambiguous Market Leader

Each day PTC’s  customers, the press, and analysts publish high-impact statements and articles on PTC. The positive momentum and press around our outstanding Q1, history-making wins and strides towards being the “Unambiguous Market Leader”.

Below is a list of highlights from the past couple of months:

Press Releases:

(Note: to stay current, or keep your customers current on all PTC Press Releases bookmark the PTC “Press Releases Page” on ptc.com)

  • Kensey Nash Selects PTC Windchill® For Product Lifecycle Management – Kensey Nash Corporation, a leading medical technology company that provides innovative solutions and technologies for a wide range of medical procedures, has selected Windchill®, PTC’s PLM software, to manage its release to manufacturing processes for improved efficiency and visibility of compliance.
  • Q1 Results Summary – PTC Announces Q1 Results, Initiates Q2 Guidance and Updates FY’10 Targets


Wall Street Reaction to Q1 Results:

FULL SUMMARIES (Note: please contact Investor Relations for detailed reports)

Battle Road Research – “Windchill Catches Fire Price Target Raised to $21.00 per Share:  With its second sequential up-tick in product sales and rising momentum for its Windchill software product suite, we are reaffirming our BUY rating on PTC (NASDAQ: PMTC – $16.54) and raising our price target from $18.00 to $21.00 per share.” Back to top

Longbow Research – “We reiterate our BUY recommendation on PMTC shares following Q&A with management about 1Q results and PMTC’s outlook. In our view, 1Q results give more credibility to management’s target for 13% or better revenue growth in FY10 and FY11. Although we do not estimate double-digit revenue growth in our base case model, such targets appear more feasible to us. Moreover, we continue to like PMTC’s bottom line leverage in an improving economy due to margin expansion potential, and we see PMTC shares as attractively valued trading at about 17x our CY10 EPS estimate ($1.04) intraday. PMTC’s license recovery and traction in PLM is happening sooner than we expected, further contributing to our positive view on PMTC shares.” Back to top

Janney Capital Markets – “Enterprise Spending Rebounding Strongly – Expect 15+ Domino Deals This Year:  We reiterate our NEUTRAL rating, fair value estimate of $16. Enterprise spending has rebounded quite strongly for PTC, particularly in North America. We believe this is also the case for other software vendors selling into this segment (and as R&D as well as IT budgets recover in this segment), a positive read-across for CRM, RNOW, KNXA, SFSF, and ICGE in our coverage. The company expects more than 12 domino wins this year, and ups the target to 15, for F2010. Our take is that this goal is conservative.” Back to top

Thomas Weisel Partners – “Parametric Technology Corporation, PLM Momentum Increasing:  What’s New: Management held a conference call discussing the Q1 results which were released Tuesday night , January 26 after market close (refer to our previous Flash Note for details). On its call, management continued to focus attention on its “domino” accounts with four PLM benchmark wins during the quarter, and noted that end-markets in the US continue to stabilize, as evidenced in the healthy large deal count. With this note, we are updating our estimates for F2010 and F2011 and raising our price target to $20. Why it Matters: We view the solid sequential PLM revenue growth in a seasonally weak quarter, the additional Domino account wins, and healthy large deal count as positive indicators that PTC’s business and competitive position continue to improve. In our opinion, the negative impact of the recession is mostly behind PTC as revenue growth was positive in all geographies, with the exception of a flat Japan. Thus, this quarter’s results reinforce our belief that growth in PLM sector should increasingly drive PTC’s overall business performance, eventually leading to higher operating margins and potential multiple expansion for the stock.” Back to top

J.P. Morgan – “Parametric Technology Corporation, Upgrading to OW on Big Deal Activity:  We are upgrading PTC to Overweight from Neutral. We waited to do this until after the earnings call because we needed clarity on whether the upside in license was a one-time pull-in of deals or a sign of sustainable improvement. In addition, we needed to better understand how the leverage of the improvement would flow to the bottom line. We now believe estimates could head higher through the year on sustainable improvement, and that the market will likely expand the multiple as it gains confidence in the 20% long-term earnings growth target. We are raising our price target to $22 (from $18) on this thesis.  Big Deal activity was not an anomaly; Pipeline looks strong; Operating leverage should improve through the year.” Back to top

HIRG – “PMTC: Wasn’t December a Q1? –  PTC released its Q1 results followed by a conference call with analysts this morning. For the Dec. qtr. the company actually had a license result meaningfully higher than it did this past fiscal Q4—a qtr. that itself was strong and represented an upside to prior expectations—with the company exceeding prior license expectations by 25% or more, so far that most substantial out-performance this qtr. within our universe of coverage and one of the stronger upsides for a company of this scale that we have seen in some time. But true to form guidance was very conservative—perhaps exceptionally so, even for this mgt.—and the question remains: In what should investors place greater stock, mgt. guidance or the combination of the company’s track record or their own eyes?” Back to top

Ticonderoga – “As part of the initiation of overall coverage of Technical Software, we are initiating coverage of the Mechanical Computer-Aided Design (MCAD)/Product Life Cycle Management (PLM) industry, including coverage of two of the principal software and services suppliers: Dassault Systèmes and Parametric Technology. We are initiating coverage of Dassault with a Neutral rating and coverage of Parametric (“PTC”) with a Buy rating and $23 price target. The more than $6 billion industry comprises product development and engineering data management, engineering data management, product simulation software and services. We expect that MCAD will be only a modestly growing category and that PLM will be the main source of new growth, with composite industry growth in the mid-single digits or better, though there will of course be differences across the brands and suppliers. In our opinion PTC is showing good momentum in its PLM business, in addition to which we expect substantial margin improvement in FY10-FY11.” Back to top

Jeffries and Company – “Parametric Technology (NASDAQ: PMTC), Channel Growth Expectations in Line with Company, Guidance Is Encouraging:  Our most recent reseller survey suggests that the channel expects license growth broadly in line with company guidance for 2010. This is encouraging given management believes the channel will grow more slowly than direct sales this year. North America is outgrowing Europe, and PMTC is taking share in the higher growth PLM market. We have not changed estimates off the back of this survey, but we feel incrementally more comfortable with our F1Q10 and FY10 numbers. We have rolled our PT methodology forward a year and raise our PT to $17.” Back to top

Needham & Co. – “PMTC: Reiterate Buy Rating, Inching Price Target to $20. Strong December Results as the Momentum Builds:  PTC posted a quite strong fiscal Q1 quarter that primarily was driven by new account and expansion wins from Windchill, the data and project management component of the firm’s business. PTC’s management took a tack that we expect to be commonplace for this earnings season – explicitly say that upsides will be reinvested in growth and implicitly remove possible future earnings upsides from guidance. The result is that consensus expectations are likely to be conservative. If investors are rational, they will see through this fog and drive the stock higher today. If not, they will figure it out later in the year as estimates inch up in the face of impossible to time, but nevertheless more frequent upside quarterly results. We have no hesitation recommending purchase of PMTC shares today and are incrementally more confident in management’s ability to meet its targets.” Back to top

Deutsche Bank – “Break-out Windchill Performance in December: 1Q shows 10% revenue upside Revenues of $258m and EPS of $0.27 showed significant upside to our estimates of $235m and $0.18 (consensus was $233m and $0.17). Stronger-than-expected licenses of $75m (up 48% y/y) was driven by enterprise Windchill business in North America. Operating margins of 17.5% beat our 11.6%. While licenses are macro sensitive, we still see attractive risk/reward given PLM momentum and what we regard as an attractive valuation. Reiterate Buy. Enterprise PLM shines; believe there’s more to come; Revised 2010 outlook embeds increased investment posture; Reiterate Buy and raise price target to $21 from $18.” Back to top

BroadPoint Amtech – “PMTC: Strong Quarter Driven by Large Deals; Guidance Somewhat Conservative:  PMTC reported a blow-out F1Q, driven by large deals primarily in the Americas. We note that the ASP for deals above $1M was $5.0M, well above the normal  range in the mid-$2M. It closed 4 new “Domino” mega deals, which are large-scale, multi-year deployments and are highly strategic to the company’s 5-year growth plan. We note that it was targeting to close five such deals this FY. Clearly, the company is off to a strong start for its FY and its product sales strategy is well suited to benefit from a significant improvement in enterprise IT spending environment for large deals.” Back to top

PiperJaffray – “Parametric Technology, Strong Q1, Mixed Q2 Guidance; Domestic Strong & Intl Lagging, But Improving:  While we continue to have a positive bias on PMTC, primarily based on valuation, we are maintaining our Neutral rating following Q1 results ahead of Street estimates and mixed Q2 guidance. We continue to see domestic stability as a positive; international (58% of total revs) continues to lag the North American rebound, but is improving.” Back to top

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Discuss: “PTC – Unambiguous Market Leader”

  1. 13 May 2010 at 2:22 am #

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    Posted by Dori Buco

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