On Thursday, KeyBanc Capital Markets increased its price target for PTC Inc. (NASDAQ:PTC) shares from $205.00 to $211.00, while maintaining an Overweight rating. The adjustment follows PTC's first-quarter constant currency Annual Recurring Revenue (ARR) growth of 10.6%, which was in line with the consensus estimate of 10.4%. Currently trading at $189.76 and near its 52-week high of $203.09, InvestingPro data indicates the stock is slightly overvalued based on its Fair Value analysis.
PTC Inc. is sticking to its fiscal year 2025 constant currency ARR guidance of 9-10% and has issued a slightly lower forecast for the second quarter, a move that KeyBanc believes to be conservative. The company's go-to-market (GTM) realignments are reportedly progressing as expected. Additionally, PTC has maintained its full-year Free Cash Flow (FCF) guidance. With impressive gross profit margins of 80.65% and revenue growth of 9.6%, InvestingPro analysis reveals 16 additional key insights about PTC's financial health.
Analysts at KeyBanc remain optimistic about PTC's mid-term FCF growth trajectory, prompting a modest increase in the price target. The new target reflects KeyBanc's sustained confidence in the company's financial outlook. The firm's estimates have been adjusted to accommodate the first-quarter results and the updated company outlook, but the ARR and FCF estimates remain largely unchanged.
KeyBanc's analysts expressed a positive outlook on PTC's execution and its near-term to mid-term FCF growth story. The price target increase to $211 is based on a 27 times multiple of the fiscal year 2026 estimated Enterprise Value to Free Cash Flow (EV/FCF) ratio, reinforcing the firm's confidence in PTC's ongoing performance and prospects. The Overweight rating suggests that KeyBanc continues to endorse PTC as an investment. Analyst targets range from $179 to $240, with a consensus recommendation of 1.75 (Buy). For deeper insights into PTC's valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, PTC Inc. has been the subject of various developments. The company has reported robust growth for fiscal year 2024, with a 25% increase in free cash flow and a 12% rise in constant currency Annual Recurring Revenue (ARR). PTC also announced a $2 billion share repurchase authorization and is focusing on five key areas to drive digital transformation for customers.
In addition, PTC has partnered with Microsoft (NASDAQ:MSFT) and Volkswagen (ETR:VOWG_p) Group to enhance the software development process in manufacturing. This collaboration aims to improve efficiency in creating and managing product requirements, testing, validating, and releasing them. The beta version of the new tool, Codebeamer Copilot, is expected to be released to select PTC customers in early 2025.
BMO Capital Markets has adjusted its outlook on PTC, increasing the price target to $225 from the previous $206 while maintaining an Outperform rating on the stock. The analyst noted the potential for a broader cyclical recovery in manufacturing end markets, which could bode well for PTC.
Lastly, PTC disclosed that board member Janesh Moorjani has tendered his resignation, effective November 29, 2024, due to personal reasons. The company has not indicated any immediate plans for a replacement on the board. These are the latest developments in PTC's ongoing operations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.