PTC Inc. (NASDAQ:PTC) just released its latest first-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.3% to hit US$550m. PTC also reported a statutory profit of US$0.55, which was an impressive 26% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from PTC's 19 analysts is for revenues of US$2.33b in 2024. This reflects a reasonable 6.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 53% to US$3.03. In the lead-up to this report, the analysts had been modelling revenues of US$2.32b and earnings per share (EPS) of US$2.89 in 2024. So the consensus seems to have become somewhat more optimistic on PTC's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.7% to US$197. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic PTC analyst has a price target of US$220 per share, while the most pessimistic values it at US$138. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that PTC's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.9% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that PTC is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around PTC's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for PTC going out to 2026, and you can see them free on our platform here..
Even so, be aware that PTC is showing 3 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
