PTC Gearing Up for Q1 Earnings: What is in the Offing?

PTC Inc. PTC is scheduled to report first-quarter fiscal 2022 results on Jan 26, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 66.7%, surpassing the Zacks Consensus Estimate by 44 cents. It pulled off a trailing four-quarter earnings surprise of 47.8%, on average.

In the fiscal first quarter, the Boston, MA-based software solutions provider is expected to have generated higher revenues on a year-over-year basis as a result of significant growth across all product segments and regions.

Factors at Play

During the quarter, PTC unveiled ThingWorx Digital Performance Management Solution (DPM). DPM has been specifically designed to provide performance insights and facilitate closed-loop problem solving on a real-time basis.

This first-of-its-kind offering enables manufacturing companies to identify the right performance issues, thereby driving efficiency. DPM offers a single universal view of performance, communicated in an understandable business metric — hours.

It empowers frontline workers to take corrective action and gain visibility into the root cause of problems. This enables them to produce the desired outcomes and achieve rapid time to value and scale in less time. The offering addresses critical manufacturing improvements and eliminates production bottlenecks to drive technological transformation.

PTC was also recognized as a Leader in ABI Research's Smart Manufacturing Platforms Competitive Ranking report. The company believes that its leadership position demonstrates its ability to address the complex requirements of Industrial enterprises with avant-garde technologies and capabilities.

A favorable product mix and continued execution on operational effectiveness initiatives might have enhanced its profitability. Strong free cash flow and incremental investments in the Atlas platform with a healthy liquidity position are likely to have acted as major tailwinds.

Despite the lingering effects of the COVID-19 pandemic, the company is witnessing considerable progress in the demand for its core CAD and PLM products supported by the solid performance of Onshape and Arena businesses.

Healthy traction of cloud-native SaaS technologies in the industrial software market might have boosted PTC’s top line in the to-be-reported quarter. All these developments are likely to have had a favorable impact on PTC’s fiscal first-quarter revenues.

The Zacks Consensus Estimate for total revenues for the quarter is pegged at $465 million, suggesting an increase from the year-earlier reported figure of $429 million. The consensus mark for earnings is currently pegged at $1 per share, indicating a 3.1% rise from 97 cents reported in the year-earlier quarter.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for PTC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

PTC Inc. Price and EPS Surprise

PTC Inc. Price and EPS Surprise

PTC Inc. price-eps-surprise | PTC Inc. Quote

Zacks Rank: PTC currently has a Zacks Rank #3.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

LendingClub Corporation LC is slated to release fourth-quarter 2021 results on Jan 26. It has an Earnings ESP of +7.81% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

LendingClub has a VGM Score of B. Its shares have gained 84.9% in the past year. The company delivered a trailing four-quarter earnings surprise of 186%, on average.

Tesla, Inc. TSLA is scheduled to release fourth-quarter 2021 results on Jan 26. The company has an Earnings ESP of +4.69% and flaunts a Zacks Rank #1, at present.

Tesla has a long-term earnings growth expectation of 38.4%. Its shares have returned 7.1% in the past year. The company delivered a trailing four-quarter earnings surprise of 25.4%, on average.

Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +4.98% and a Zacks Rank of 2. The company is set to report fourth-quarter 2021 results on Jan 26.

Vertex Pharmaceuticals has a long-term earnings growth expectation of 15.5%. Its shares have gained 14.7% in the past six months. The company delivered a trailing four-quarter earnings surprise of 8%, on average.

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