Subscribe to Entrepreneur for $5

Here's What You Should Know Ahead of PTC's Q4 Earnings Release

PTC's Q4 performance is likely to have benefited from strong demand for PLM offerings and contribution from Arena Solutions.

This story originally appeared on Zacks

PTC Inc PTC is scheduled to report fourth-quarter fiscal 2021 results on Nov 3.

The Zacks Consensus Estimate for fiscal fourth-quarter revenues is pegged at $427.5 million, which suggests growth of 9.3% from the year-ago quarter’s reported figure. The consensus mark for earnings is at 66 cents, which indicates a year-over-year decline of 15.4%.

The company has a trailing four-quarter earnings surprise of 40.9%, on average.

PTC reported third-quarter fiscal 2021 non-GAAP earnings of 83 cents per share, up 34% on a year-over-year basis. The bottom line beat the Zacks Consensus Estimate by 29.7%. Revenues came in at $436 million, up 24% year over year (up 19% at constant currency or cc) driven by strength across Core and Growth product groups as well as contributions from Arena. The top line surpassed the Zacks Consensus Estimate by 5.9%.

Let’s see how things have shaped up prior to the earnings announcement.

- Zacks

PTC Inc. Price and EPS Surprise


PTC Inc. Price and EPS Surprise

PTC Inc. price-eps-surprise | PTC Inc. Quote


Factors to Consider

Strength in industrial Internet of things (IoT) solutions and solid demand for product lifecycle management (PLM) offerings are expected to have benefited PTC’s fiscal fourth-quarter top line.

Solid uptick in demand for ThingWorx and Windchill platforms as well as Vuforia-Chalk and Vuforia Expert Capture solution is likely to have acted as a tailwind.

New deal wins on the back of synergies from strategic collaborations with ANSYS, Rockwell Automation and Microsoft MSFT are expected to have driven revenues in the quarter under review.

Increasing traction in bookings, due to the pandemic-induced digital transformation wave and ongoing momentum in core business, is likely to have contributed to the quarterly performance. The transition to a subscription business model from a perpetual license model is expected to have boosted recurring revenue growth.

Contribution from Arena Solutions is expected to have positively impacted top-line growth in the to-be-reported quarter. Arena Solutions’ takeover has been helping PTC in providing its customers (especially in the medical devices and high-tech manufacturing verticals) with a comprehensive software as a service (SaaS) solution, which encompasses computer-aided design (CAD) and PLM offerings.

The favorable mix of new logo activity and healthy uptake of Onshape’s school-from-home CAD solution in the education vertical due to the continuation in online learning is likely to have benefitted PTC’s Onshape business.

Supply chain disruptions, increasing operating expenses and exposure to verticals like commercial airlines, yet to recover entirely from the pandemic aftermath, are likely to have affected PTC’s performance in the fiscal fourth quarter.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for PTC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

PTC has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks, which you may consider, as our proven model shows that these have the right mix of elements to beat estimates this time around:

HP Inc HPQ has an Earnings ESP of +1.89% and sports a Zacks Rank #2, presently. You can see the complete list of today's Zacks #1 Rank stocks here.

Synaptics Incorporated SYNA has an Earnings ESP of +0.38% and a Zacks Rank #2.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


Microsoft Corporation (MSFT): Free Stock Analysis Report


HP Inc. (HPQ): Free Stock Analysis Report


Synaptics Incorporated (SYNA): Free Stock Analysis Report


PTC Inc. (PTC): Free Stock Analysis Report


To read this article on click here.


Zacks Investment Research