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Strength Seen in PTC Inc. (PTC): Can Its 4.5% Jump Turn into More Strength?

PTC Inc. (PTC) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the...

This story originally appeared on Zacks

PTC Inc. (PTC) shares soared 4.5% in the last trading session to close at $120.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.6% loss over the past four weeks.

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The increase in share price can be attributed to higher demand for PTC’s industrial Internet of things solutions and solid demand for product lifecycle management (PLM) offerings. Solid traction witnessed for the company’s ThingWorx and Windchill platforms as well as Vuforia-Chalk and Vuforia Expert Capture and Onshape solutions bodes well.

Higher bookings, due to the pandemic-induced digital transformation wave and ongoing momentum in core business, is driving the top line.

PTC is also accelerating software as a service (SaaS) transition by improving the capacity on its Atlas platform and boosting SaaS capabilities of its core computer-aided design (CAD) and PLM products.

This product development software maker is expected to post quarterly earnings of $1 per share in its upcoming report, which represents a year-over-year change of +3.1%. Revenues are expected to be $464.88 million, up 8.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For PTC Inc., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on PTC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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