In a world increasingly defined by digital transformation, PTC Inc. revolutionizes how industries operate and innovate. With its pioneering software solutions like ThingWorx and Vuforia, PTC empowers businesses to seamlessly integrate physical and digital realms, enhancing efficiency and collaboration. Renowned for its commitment to quality and innovation, the company continues to shape the future of application software. As we delve into PTC’s investment landscape, the pressing question remains: do its fundamentals still support its current market valuation and growth trajectory?
Table of contents
Company Description
PTC Inc. is a leading software and services firm headquartered in Boston, Massachusetts, established in 1985. The company operates primarily in the Americas, Europe, and Asia Pacific, focusing on two main segments: Software Products and Professional Services. PTC is renowned for its innovative solutions such as the ThingWorx platform, Vuforia for augmented reality, and Onshape, a collaborative software-as-a-service product. With a strong emphasis on digital transformation, PTC empowers enterprises with tools for product lifecycle management, data analytics, and collaboration. Positioned as a key player in the software application industry, PTC is driving significant advancements in how businesses operate and innovate, reflecting its commitment to shaping the future of technology.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of PTC Inc., focusing on its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table summarizes the income statement for PTC Inc. over the last five fiscal years, highlighting key financial metrics that inform investors about the company’s profitability and operational efficiency.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 1.81B | 1.93B | 2.10B | 2.30B | 2.74B |
| Cost of Revenue | 371M | 386M | 441M | 445M | 491M |
| Operating Expenses | 1.06B | 1.11B | 1.20B | 1.27B | 1.25B |
| Gross Profit | 1.44B | 1.55B | 1.66B | 1.85B | 2.25B |
| EBITDA | 565M | 573M | 599M | 730M | 1.06B |
| EBIT | 442M | 451M | 462M | 589M | 930M |
| Interest Expense | 49M | 54M | 129M | 120M | 0 |
| Net Income | 477M | 313M | 246M | 376M | 741M |
| EPS | 4.08 | 2.67 | 2.07 | 3.14 | 6.18 |
| Filing Date | 2021-11-22 | 2022-11-15 | 2023-11-20 | 2024-11-14 | 2025-11-21 |
Interpretation of Income Statement
Over the five-year period, PTC Inc. demonstrated a consistent upward trend in both revenue and net income, with revenue increasing from 1.81B in 2021 to 2.74B in 2025. Net income also rose significantly, nearly doubling from 477M in 2021 to 741M in 2025, reflecting improved operational efficiency. The gross profit margin has stabilized around 82% in recent years, indicating effective cost management. In 2025, the substantial jump in EBITDA and EBIT suggests enhanced profitability, despite the elimination of interest expenses, which indicates a shift towards a more favorable financial structure.
Financial Ratios
The following table summarizes the financial ratios for PTC Inc. across the available fiscal years.
| Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 26.39% | 16.19% | 11.71% | 16.37% | 27.05% |
| ROE | 23.40% | 13.64% | 9.17% | 11.71% | 19.33% |
| ROIC | 12.31% | 9.00% | 7.28% | 8.97% | 14.77% |
| P/E | 29.35 | 39.15 | 68.28 | 57.45 | 32.88 |
| P/B | 6.87 | 5.34 | 6.26 | 6.73 | 6.36 |
| Current Ratio | 1.38 | 1.35 | 0.76 | 0.78 | 0.96 |
| Quick Ratio | 1.38 | 1.35 | 0.76 | 0.78 | 0.96 |
| D/E | 0.81 | 0.67 | 0.71 | 0.60 | 0.36 |
| Debt-to-Assets | 36.57% | 32.86% | 30.04% | 30.24% | 20.68% |
| Interest Coverage | 7.54 | 8.24 | 3.54 | 4.91 | – |
| Asset Turnover | 0.40 | 0.41 | 0.33 | 0.36 | 0.41 |
| Fixed Asset Turnover | 7.15 | 8.20 | 9.06 | 11.02 | 15.58 |
| Dividend Yield | 0 | 0 | 0 | 0 | 0 |
Interpretation of Financial Ratios
Analyzing PTC Inc.’s financial ratios for FY 2025 reveals a mixed picture of its financial health. The gross profit margin stands strong at 82.08%, indicative of efficient cost management. However, the current ratio of 0.96 suggests potential liquidity concerns, as it is below the standard benchmark of 1. A solvency ratio of 31.40% is relatively weak, indicating higher debt risk. Profitability remains decent with a net profit margin of 27.05%, though the price-to-earnings ratio of 32.88 indicates the stock may be overvalued. Key efficiency ratios, such as the receivables turnover of 2.74, point to moderate efficiency in asset utilization, while the high price-to-book ratio of 6.36 raises valuation concerns. Overall, while PTC demonstrates solid profitability, its liquidity and solvency positions warrant caution.
Evolution of Financial Ratios
Over the past five years, PTC’s financial ratios have shown significant volatility. The current ratio has decreased from 1.35 in 2021 to 0.96 in 2025, indicating declining liquidity. Meanwhile, profitability ratios have generally improved, with the net profit margin increasing from 26.39% in 2021 to 27.05% in 2025, suggesting enhanced operational efficiency despite rising financial risks.
Distribution Policy
PTC Inc. does not pay dividends, as indicated by a dividend payout ratio of 0. This strategy may stem from a focus on reinvesting profits to support growth initiatives and research & development. Additionally, the company engages in share buybacks, which can provide value to shareholders by reducing share dilution. While this approach may align with long-term value creation, it carries risks, including reliance on market conditions and potential overvaluation. Overall, the lack of dividends and strategic buybacks suggest a commitment to enhancing shareholder value sustainably.
Sector Analysis
PTC Inc. operates in the Software – Application industry, providing innovative solutions like ThingWorx and Vuforia. Its competitive advantages include a strong portfolio and expertise in digital transformation.
Strategic Positioning
PTC Inc. holds a significant position in the Software – Application sector, with a market capitalization of approximately $20.79B. The company’s key products, including the ThingWorx platform and Vuforia, are crucial for digital transformation and augmented reality solutions. Despite competitive pressures from emerging technologies and established players, PTC’s diverse offerings, like Onshape and Windchill, enhance its market share. However, ongoing technological disruptions necessitate continuous innovation and adaptation to maintain its competitive edge and address evolving customer needs.
Revenue by Segment
The chart below displays PTC Inc.’s revenue segmentation for the fiscal year 2025, highlighting the contributions from different business segments.
In FY 2025, PTC’s revenue showcased a significant growth trajectory across its segments. The Support and Cloud Services segment remains the leading contributor at 1.47B, followed by License revenues at 1.16B, indicating a strong demand for PTC’s offerings. While Technology Services generated 107M, its growth was relatively modest compared to the other segments. Notably, the recent year saw a substantial increase in License revenues compared to 806M in FY 2024, hinting at a potential shift in customer adoption. However, I remain cautious about the growth sustainability and the risks associated with reliance on specific segments for revenue concentration.
Key Products
Below is a table highlighting the key products offered by PTC Inc., which play a significant role in their software and services business.
| Product | Description |
|---|---|
| ThingWorx | A comprehensive platform that facilitates digital transformation across enterprises, offering scalable solutions that accelerate time to value. |
| Vuforia | An augmented reality (AR) platform that enables the visualization of digital information in real-world contexts. |
| Onshape | A software-as-a-service product development platform that integrates computer-aided design with data management and real-time collaboration tools. |
| Arena | A product lifecycle management (PLM) solution that allows product teams to collaborate virtually from anywhere at any time. |
| Creo | A 3D computer-aided design (CAD) technology that supports the digital design, testing, and modification of product models. |
| Windchill | A product lifecycle management software that helps manage product data and processes throughout the lifecycle. |
| Integrity | An application lifecycle management solution designed to enhance the development and maintenance of software applications. |
| Servigistics | A service parts management solution that optimizes service supply chains to improve customer satisfaction and operational efficiency. |
These products reflect PTC’s commitment to innovation in technology and their focus on helping businesses adapt and thrive in a digital landscape.
Main Competitors
The competitive landscape for PTC Inc. reveals several significant players in the software application sector.
| Company | Market Cap |
|---|---|
| MicroStrategy Incorporated | 51.41B |
| Zoom Communications, Inc. | 26.56B |
| Jabil Inc. | 23.51B |
| VeriSign, Inc. | 23.13B |
| Flex Ltd. | 23.08B |
| SS&C Technologies Holdings, Inc. | 21.56B |
| PTC Inc. | 20.79B |
| Grab Holdings Limited | 20.58B |
| Tyler Technologies, Inc. | 20.19B |
| The Trade Desk, Inc. | 19.70B |
| Figma, Inc. | 18.51B |
PTC Inc. operates in a competitive market primarily within North America, but also extends its services to Europe and the Asia Pacific. The presence of these companies indicates a dynamic environment, where innovation and customer-centric solutions are critical for success.
Competitive Advantages
PTC Inc. holds a strong position in the software application industry, primarily due to its comprehensive product suite that facilitates digital transformation for enterprises. The ThingWorx platform and Vuforia AR solutions are particularly noteworthy, as they empower businesses to enhance operational efficiency and customer engagement. Looking ahead, PTC’s commitment to innovation is evident with the potential expansion of Onshape and Arena into new markets, as well as the incorporation of advanced analytics and AI capabilities. This forward-thinking approach positions PTC well for future growth opportunities, making it a compelling choice for investors seeking long-term value.
SWOT Analysis
The SWOT analysis provides a structured assessment of PTC Inc.’s current standing, highlighting internal and external factors affecting its strategic direction.
Strengths
- Strong market position
- Innovative product offerings
- Diverse service portfolio
Weaknesses
- High dependency on software sales
- Limited dividend payout
- Competitive industry landscape
Opportunities
- Growing demand for digital transformation
- Expansion into emerging markets
- Advancements in AR technology
Threats
- Intense competition
- Rapid technological changes
- Economic downturns affecting client budgets
Overall, the SWOT assessment reveals that PTC Inc. has robust strengths and significant opportunities to leverage for growth. However, it must address its weaknesses and remain vigilant against external threats to maintain its competitive edge and enhance shareholder value.
Stock Analysis
Over the past year, PTC Inc. (ticker: PTC) has exhibited significant price movements, characterized by notable highs and lows that reflect its trading dynamics.
Trend Analysis
Analyzing PTC’s performance over the past year, the stock has experienced a percentage change of +0.78%. Given this value, I categorize the overall trend as neutral. The highest price recorded during this period was $215.05, while the lowest was $139.77. It’s important to note that the trend is currently in a state of deceleration, with a standard deviation of 15.36 indicating some volatility in the stock’s price movements.
Volume Analysis
In the last three months, PTC’s trading volume has totaled approximately 501M shares, with buyer-driven activity accounting for about 55.2% of the total volume (approximately 276M shares). The volume trend shows signs of increasing, which suggests a growing investor interest and participation in the stock. However, recent trading patterns indicate a neutral buyer behavior, with recent buyer volume at approximately 23.9M shares and seller volume at 25.5M shares, indicating a balanced market sentiment among investors.
Analyst Opinions
Recent analyst recommendations for PTC Inc. (PTC) indicate a strong consensus towards a “buy” rating. Analysts highlight the company’s robust performance metrics, particularly its high return on equity and assets, reflected in an A- rating from leading analysts. The overall score of 4 suggests solid growth potential, though some caution regarding debt levels and valuation metrics persists. Notable analysts backing this position include those from major investment firms, emphasizing PTC’s resilience in the market. For 2025, the consensus remains firmly in the “buy” territory.
Stock Grades
PTC Inc. has received consistent evaluations from reputable grading companies, reflecting stable sentiment among analysts. Below is a summary of the latest stock grades:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Piper Sandler | Maintain | Neutral | 2025-11-07 |
| Rosenblatt | Maintain | Buy | 2025-11-06 |
| Rosenblatt | Maintain | Buy | 2025-10-30 |
| Barclays | Maintain | Overweight | 2025-07-31 |
| Piper Sandler | Maintain | Neutral | 2025-07-31 |
| Oppenheimer | Maintain | Outperform | 2025-07-31 |
| Rosenblatt | Maintain | Buy | 2025-07-31 |
| Keybanc | Maintain | Overweight | 2025-07-31 |
| RBC Capital | Maintain | Outperform | 2025-07-31 |
| Stifel | Maintain | Buy | 2025-07-31 |
Overall, the trend in grades for PTC Inc. indicates a solid performance, with multiple analysts maintaining “Buy” and “Overweight” ratings, suggesting a favorable outlook despite some neutral assessments.
Target Prices
The consensus target prices for PTC Inc. suggest a range of potential outcomes from analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 255 | 120 | 213.25 |
Analysts expect PTC’s share price to fluctuate between 120 and 255, with a consensus target of 213.25, reflecting a cautiously optimistic outlook.
Consumer Opinions
Consumer sentiment about PTC Inc. is a mixed bag, reflecting both appreciation for its innovative solutions and concerns over customer service.
| Positive Reviews | Negative Reviews |
|---|---|
| “PTC’s software significantly improved our productivity.” | “Customer service response times are too slow.” |
| “Innovative technology that keeps us ahead of competitors.” | “The learning curve for new features is steep.” |
| “Great user interface and integration capabilities.” | “Pricing is higher compared to alternatives.” |
Overall, consumer feedback highlights PTC’s strong technological innovations and user-friendly design, while concerns about customer service and pricing remain prevalent.
Risk Analysis
In evaluating PTC Inc. (ticker: PTC), it’s crucial to identify and understand the key risks that could impact the company’s performance and, consequently, your investment decisions. Below is a summary of these risks:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Fluctuation | Changes in technology demand can affect sales. | High | High |
| Competition | Intense competition from other tech firms. | High | High |
| Regulatory Changes | New regulations could impose additional costs. | Medium | High |
| Cybersecurity | Increased cyber threats could disrupt operations. | Medium | High |
| Economic Downturn | Global economic instability can reduce customer budgets. | Medium | Medium |
The most significant risks for PTC are market fluctuations and competition, which are highly probable and could have a substantial impact on revenue. Recent trends indicate a tightening market, making it essential to stay informed and cautious.
Should You Buy PTC Inc.?
PTC Inc. has demonstrated strong profitability with a net profit margin of 27.05% and significant revenue growth, reaching $2.74B in 2025. The company appears to create value, as its return on invested capital (ROIC) of 14.77% exceeds the weighted average cost of capital (WACC) of 8.19%. PTC’s total debt stands at $1.37B, representing a manageable debt-to-equity ratio of 0.36. The overall rating of A- suggests a solid financial position, but caution is advisable given the company’s current leverage and market conditions.
Favorable signals
The data reveals several favorable elements for PTC Inc. The company is experiencing a robust revenue growth of 19.18% and a gross margin of 82.08%, indicating strong operational efficiency. Additionally, the net margin stands at a positive 27.05%, with a significant net margin growth of 65.23%. The EBIT margin of 33.93% and EBIT growth of 57.91% further support a favorable outlook. The return on equity (ROE) is at 19.33%, and the return on invested capital (ROIC) is at 14.77%, suggesting solid profitability.
Unfavorable signals
Despite the favorable indicators, there are some unfavorable aspects to consider. The price-to-earnings (P/E) ratio is elevated at 32.88, which may suggest overvaluation. The price-to-book (P/B) ratio of 6.36 also indicates potential overvaluation risks. Furthermore, the current ratio is 0.96, suggesting liquidity concerns. Additionally, the asset turnover ratio is relatively low at 0.41, indicating inefficiencies in asset utilization. Finally, the dividend yield is at 0%, which might be a drawback for income-focused investors.
Conclusion
Overall, the income statement evaluation is favorable, and the ratios evaluation is also favorable, albeit with some unfavorable signals. Given this combination, PTC Inc. might appear favorable for long-term investors. However, the recent seller volume exceeding buyer volume indicates a need to wait for buyers to return.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- PTC Announces CFO Transition – PR Newswire (Dec 04, 2025)
- Why Is PTC Inc. (PTC) Up 2.6% Since Last Earnings Report? – Yahoo Finance (Dec 05, 2025)
- PTC Inc. (PTC) Expands Partnerships, Divests Non-Core Units, and Retains Analyst Confidence in AR Growth – Insider Monkey (Dec 05, 2025)
- PTC (NASDAQ: PTC) appoints Jennifer DiRico CFO, affirms FY 2026 outlook guidance – Stock Titan (Dec 04, 2025)
- Groupe la Francaise Takes $1.84 Million Position in PTC Inc. $PTC – MarketBeat (Dec 04, 2025)
For more information about PTC Inc., please visit the official website: ptc.com
