Overview
Oppenheimer maintained an Outperform rating on PTC Inc. and held a $200 per share price target, a level that implies substantial upside relative to the stock's most recently reported price of $151.34. InvestingPro data referenced by market commentary indicates the shares may be trading below their Fair Value estimate.
Quarterly results and cash flow
PTC posted fiscal first-quarter results that met or exceeded management guidance on several key fronts. Annual recurring revenue (ARR) grew 9.0% on an ex-foreign-exchange and ex-divestiture basis, placing the company at the top of its guided ARR range of 8.5-9.0%. Free cash flow was $267 million, in line with the company's guidance of $265-270 million.
Additional company-level profitability metrics cited in coverage include a Piotroski Score of 9 and gross profit margins of 83.8% as reported in InvestingPro data, both pointing to strong internal financial health.
Guidance and near-term outlook
For fiscal year 2026, PTC reiterated ARR growth guidance of 7.0-9.0% excluding foreign exchange impacts. When also excluding the Kepware and ThingWorx businesses, management's ARR range is 7.5-9.5%. Free cash flow guidance remains approximately $1 billion for the year.
However, the company set second-quarter guidance for net-new ARR of $35-50 million, a range that is below the consensus analyst expectation of roughly $54 million. This guidance represents a near-term metric where the company falls short of analyst estimates.
Deal activity, divestiture and capital allocation
Oppenheimer highlighted improving deal activity and better sales productivity at PTC, which underpins the firm's conviction that net-new ARR growth could resume in the near term. Management expects to complete the divestiture of its Kepware and ThingWorx businesses on or before April 1. The transaction is expected to generate approximately $365 million in proceeds.
PTC plans to deploy the proceeds toward share repurchases and now anticipates repurchasing between $1.1 billion and $1.3 billion of stock in fiscal 2026. That amount corresponds to roughly 6-7% of the company's market capitalization, according to the disclosures cited in the coverage.
Market reaction and valuation metrics
Despite the quarter's positive surprises, the stock experienced a modest decline in after-hours trading following the results. Over the past six months the shares have declined 29.5%. The company carries a reported PEG ratio of 0.25, which reflects a low price-to-earnings multiple relative to expected earnings growth.
Earnings detail
PTC reported adjusted earnings per share of $1.92 for the quarter, a beat versus the $1.55 figure analysts had modeled, representing a 23.87% upside to expectations. Revenue for the period was $686 million, exceeding the consensus of $634.94 million by 8.04%.
Analyst coverage and next steps
Coverage noted that some analysts may be re-evaluating their views after the results and guidance, though no specific upgrades or downgrades were reported in the materials referenced. The company’s combination of solid reported margins, strong cash generation, a planned divestiture with explicit proceeds usage, and a sizable buyback program were central to Oppenheimer’s continued positive stance.
Reporting on PTC’s metrics continues to focus on whether improving deal activity and the impacts of the divestiture will translate into resumed net-new ARR growth in upcoming quarters.