Guggenheim Previews PTC's Q1 Earnings

PTC Inc PTC is scheduled to report Q1 results after Wednesday's close. Macro concerns are unlikely to have impacted the company’s results, which could be in-line with expectations, according to Guggenheim.

The Analyst

Guggenheim’s Ken Wong maintained a Buy rating on PTC, with an unchanged $100 price target.

The Thesis

PTC’s license and subscription bookings are expected to have declined within the guidance range of $100 million-$110 million. The company meeting the consensus expectations for Q1 may be viewed positively by investors, who are focusing on macro concerns, Wong said.

Subscription ACV may come in-line with the consensus estimates of $40 million, although mix could have been be impacted by the EoL of perpetual license in January. Investors may not react too negatively to this, given the one-off nature of this buying behavior.

PTC’s Q1 revenue could meet the upper end of the guidance range of $318 million-$326 million, beating the consensus estimate of $324 million, despite the negative currency impact and fewer selling days in the quarter.

Wong expressed optimism regarding CFO Andrew Miller being able to continue to manage costs and drive EBIT margins higher than the Street’s estimate of 21.6 percent.

“We have not run into any company or sector specific commentary that would indicate pullbacks in IT spend and thus we do not expect changes to FY19 guide, specifically L&S bookings ($500-520M) and FCF ($273-283M) outside of FX,” Wong wrote in the report.

Price Action

Shares of PTC were trading down 1.7 percent at $86.11 Tuesday afternoon.