PTC Inc. (PTC)
UndervaluedFundamental
80
Price
$146.49
Market Cap
$14.91B
Part 1 · What the company is worth
Overview
PTC sells software that engineers use to design products and manage everything about them over their lifetime: CAD tools such as Creo and Onshape for drawing parts, Windchill for tracking product data through design and manufacturing, and add-on tools for managing software content and service operations in complex machines. Customers are mostly industrial manufacturers — makers of vehicles, machinery and electronics — who build the software into how their engineering teams work every day.
How it makes money
About 95% of PTC's revenue is recurring, coming from subscription fees for its cloud products and annual support and maintenance fees on software still licensed on-premise. Because engineering teams design around a specific CAD or product-data system for years, contracts tend to renew and grow in value as customers add more users or modules rather than switch providers.
Competitive moat
Switching costs · NarrowYears of product designs, engineering workflows and integrations with manufacturing systems accumulate inside PTC's software, so replacing it would mean re-doing that work and retraining engineers, which discourages switching. The advantage is narrow because Siemens, Dassault Systèmes and Autodesk are larger, better-capitalized rivals fighting for the same enterprise contracts.
What drives demand
Moderately cyclicalNew licenses and expansion of existing contracts follow manufacturers' engineering and IT budgets, which contract when industrial production slows. The large recurring subscription and maintenance base cushions the effect, since existing customers keep paying even as new spending is deferred.
Key risks
- Larger, better-capitalized competitors — Siemens and Dassault Systèmes are significantly larger and can outspend PTC on cloud infrastructure and product development, while Microsoft and SAP are expanding into adjacent industrial software.
- Cybersecurity exposure — PTC's software holds customers' proprietary product designs; a successful cyberattack could compromise that data, damage its reputation and trigger significant remediation costs.
- Reliance on partners and cloud providers — PTC depends on a network of resellers and third-party cloud infrastructure to deliver and support its products; disruption at those partners can affect service and sales.
- Sensitivity to manufacturing capital spending — New software sales and contract expansions depend on industrial customers' willingness to invest in engineering tools, which they cut back first when production slows.
The case for
Buyers argue that a 95%-recurring revenue base, growing annual recurring revenue and deep entrenchment inside customers' engineering workflows give PTC a durable, high-margin business even in a market with larger rivals.
The case against
Sellers fear that Siemens and Dassault Systèmes can invest far more in cloud infrastructure and next-generation features, and that a slowdown in industrial capital spending would still weigh on new sales even with a large recurring base.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 19, 2026 with claude-haiku-4-5 — shared with all users
Listed by PTC among its CAD and PLM competitors: Inventor, Fusion and Autodesk's cloud product-data tools target the same design engineers, with particular overlap in small and mid-sized manufacturers.
PTC names SAP as a competitor in service lifecycle management, and SAP's PLM and asset/service modules are sold to the same industrial customers as an extension of the ERP they already run.
Named by PTC in its 10-K as a CAD and PLM rival: its CATIA and SOLIDWORKS design tools and its 3DEXPERIENCE/ENOVIA platform chase the same manufacturing engineering departments that buy Creo and Windchill.
Its Digital Industries Software arm sells NX and Teamcenter, the head-to-head alternatives to Creo and Windchill in automotive, aerospace and industrial machinery accounts, and PTC also names it as an ALM competitor.
A privately held PLM vendor whose Aras Innovator platform is pitched directly against Windchill as a more openly customizable system for managing product data across a manufacturer's lifecycle.
Balance Sheet & Liquidity
Revenue
$2.95B
Trailing 12 months (through 6/30/2026)
Net Income
$1.22B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$857M
Total Equity
$3.83B
Total Liabilities
$2.79B
Current Ratio
1.03
Interest Coverage
17.10
Debt/EBITDA
1.48
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$238.33
Current Price
$146.49
Margin of Safety
+38.5%
Fair Value Range
$154.92 - $321.75
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
13.65
ROE
19.2%
P/B Ratio
4.39
P/FCF
16.27
Gross Margin
84.5%
ROIC
17.1%
Profitability Radar
Value Creation (Economic Moat)
ROIC
17.1%
WACC
9.4%
ROIC − WACC
+7.6 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (23)
- EPS shows upward trend
- EPS CAGR 13.75%
- Price CAGR 11.74%
- ROIC 17.1%
- Gross Margin 84.5%
- P/FCF 16.27
- Debt/Equity ratio
- Operating Margin 37.8%
- Positive Free Cash Flow
- CapEx intensity
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Return on Tangible Assets
- ROE 32.6%
- Revenue Growth 5Y 13.4%
- Analyst Consensus 65% Buy
- Earnings Surprise avg 24.8%
- PEG Ratio 0.30
- Earnings Quality (OCF/NI) 0.78
- Share Dilution 0.1%
- Net Margin Trend 41.4% vs 20.7%
- Piotroski F-Score 9/9
Failed (4)
- P/B Ratio 4.39
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
Unavailable (1)
- Dividend Payout NaN%
Piotroski F-Score
Strong financial health
Earnings Quality
Moderate: some gap between profits and cash
Share Dilution
Share count is stable
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Neil Barua | President, CEO & Director | 47 |
| Mr. Aaron C. Von Staats Esq. | Executive VP, General Counsel & Corporate Secretary | 59 |
| Ms. Catherine A. Kniker | EVP, Chief Marketing & Sustainability Officer | 59 |
| Mr. Robert Dahdah | Executive VP & Chief Revenue Officer | 57 |
| Ms. Jennifer DiRico | Executive VP & CFO | 40 |
| Ms. Alice Christenson | Chief Accounting Officer | - |
| Mr. Michael Donald Maguire | Head of Investor Relations | - |
| Ms. Beth Conway | Executive VP & Chief People Officer | - |
| Catherine Gorecki | Senior VP of Corporate & Securities Counsel and Assistant Secretary | - |
| Mr. Amit Jain | Chief Strategy Officer | - |
Audit Risk
8
Board Risk
3
Compensation Risk
3
Shareholder Rights Risk
9
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2025-11-21
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-07-31
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-07-29
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for PTC, sourced from Markets Gazette.
- 5/7/2026POSITIVEPTC Stock Surges Over 7% Overnight: Why Is It Moving?
PTC Inc. shares experienced a significant surge of 7.53% in after-hours trading following its Q2 fiscal 2026 earnings report. The company surpassed revenue estimates by 8.63% and earnings per share (EPS) expectations by a substantial 33.83%. This strong performance indicates robust operational execution and better-than-anticipated market reception for its products or services. For investors, these results suggest a positive trajectory and potential for continued growth, likely leading to upward price target adjustments from analysts.
via Markets Gazette