PTC - Embedded Expectations Analysis - 2019 05 07
PTC Inc. (PTC:USA) currently trades well above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 49.1x Uniform P/E, implying bullish expectations for the firm. However, management may be concerned about restructuring efforts, their ability to sustain deal wins, and the capabilities of their technology.Specifically, management may be downplaying concerns about headwinds from their restructuring efforts, and may be concerned about their ability to sustain their bookings mix amidst a weaker economic backdrop. In addition, they may lack confidence in their ability to sustain deal wins in Asia Pacific and through their Microsoft alliance, and may be exaggerating the potential of their ANSYS strategic alliance, the quality of their Rockwell partnership, and the capabilities of their Creo Simulation Live product. Furthermore, they may be exaggerating conversion growth opportunities in CAD, the stability of their recurring software revenue, and client satisfaction with their technology.
PTC is a software and services company. The company's products and services include: 3D Modeling, which enables users to create designs, analyze designs, perform engineering calculations and utilize the information created downstream using 2D, 3D, parametric and direct modeling; Lifecycle Management, which enables product data management, as well as communication and collaboration across the enterprise, including product development, manufacturing and the supply chain; Data Orchestration, which delivers tools, technologies, and solutions that enable companies to develop and deploy industrial IoT applications; and Experience Creation, which provides a way to capture, create, and deliver content.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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