Overall PTC gets a fundamental rating of 7 out of 10. We evaluated PTC against 278 industry peers in the Software industry. PTC scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PTC is not valued too expensively and it also shows a decent growth rate. These ratings could make PTC a good candidate for quality investing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

PTC had positive earnings in the past year.
PTC had a positive operating cash flow in the past year.
In the past 5 years PTC has always been profitable.
In the past 5 years PTC always reported a positive cash flow from operatings.

1.2 Ratios

PTC has a Return On Assets of 11.09%. This is amongst the best in the industry. PTC outperforms 86.69% of its industry peers.
With an excellent Return On Equity value of 19.18%, PTC belongs to the best of the industry, outperforming 87.05% of the companies in the same industry.
The Return On Invested Capital of PTC (14.98%) is better than 92.09% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PTC is in line with the industry average of 10.73%.
The 3 year average ROIC (11.08%) for PTC is below the current ROIC(14.98%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	11.09%
ROE	19.18%
ROIC	14.98%

ROA(3y)6.96%

ROA(5y)7.63%

ROE(3y)13.35%

ROE(5y)15.42%

ROIC(3y)11.08%

ROIC(5y)10.4%

1.3 Margins

PTC's Profit Margin of 26.80% is amongst the best of the industry. PTC outperforms 87.77% of its industry peers.
PTC's Profit Margin has improved in the last couple of years.
PTC has a Operating Margin of 36.77%. This is amongst the best in the industry. PTC outperforms 94.96% of its industry peers.
In the last couple of years the Operating Margin of PTC has grown nicely.
Looking at the Gross Margin, with a value of 83.76%, PTC belongs to the top of the industry, outperforming 89.93% of the companies in the same industry.
PTC's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	36.77%
PM (TTM)	26.8%
GM	83.76%

OM growth 3Y12.68%

OM growth 5Y16.28%

PM growth 3Y18.28%

PM growth 5Y24.49%

GM growth 3Y1.52%

GM growth 5Y1.68%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

PTC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
PTC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, PTC has more shares outstanding
PTC has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 5.32 indicates that PTC is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 5.32, PTC is in the better half of the industry, outperforming 75.18% of the companies in the same industry.
PTC has a debt to FCF ratio of 1.40. This is a very positive value and a sign of high solvency as it would only need 1.40 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.40, PTC is in the better half of the industry, outperforming 71.94% of the companies in the same industry.
PTC has a Debt/Equity ratio of 0.31. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of PTC (0.31) is worse than 61.51% of its industry peers.
Although PTC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.31
Debt/FCF	1.4
Altman-Z	5.32

ROIC/WACC1.36

WACC10.98%

2.3 Liquidity

A Current Ratio of 1.12 indicates that PTC should not have too much problems paying its short term obligations.
PTC has a worse Current ratio (1.12) than 69.42% of its industry peers.
PTC has a Quick Ratio of 1.12. This is a normal value and indicates that PTC is financially healthy and should not expect problems in meeting its short term obligations.
PTC has a worse Quick ratio (1.12) than 68.70% of its industry peers.
The current and quick ratio evaluation for PTC is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

		Industry Rank	Sector Rank
Current Ratio	1.12
Quick Ratio	1.12

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

PTC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 57.17%, which is quite impressive.
PTC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.59% yearly.
The Revenue has grown by 19.18% in the past year. This is quite good.
The Revenue has been growing by 13.44% on average over the past years. This is quite good.

EPS 1Y (TTM)57.17%

EPS 3Y20.43%

EPS 5Y25.59%

EPS Q2Q%125.32%

Revenue 1Y (TTM)19.18%

Revenue growth 3Y12.32%

Revenue growth 5Y13.44%

Sales Q2Q%42.65%

3.2 Future

PTC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.92% yearly.
PTC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.23% yearly.

EPS Next Y-1.03%

EPS Next 2Y4.3%

EPS Next 3Y6.68%

EPS Next 5Y6.92%

Revenue Next Year7.51%

Revenue Next 2Y7.94%

Revenue Next 3Y6.99%

Revenue Next 5Y8.23%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 19.52, PTC is valued on the expensive side.
Based on the Price/Earnings ratio, PTC is valued a bit cheaper than 74.46% of the companies in the same industry.
PTC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.30.
The Price/Forward Earnings ratio is 19.72, which indicates a rather expensive current valuation of PTC.
PTC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PTC is cheaper than 71.58% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, PTC is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	19.52
Fwd PE	19.72

4.2 Price Multiples

78.42% of the companies in the same industry are more expensive than PTC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, PTC is valued a bit cheaper than the industry average as 75.54% of the companies are valued more expensively.