Analyst Research Report Snapshot

Title:

PMTC: 3Q13 review; reducing FY13E-FY14E; initiating FY15E

Price:

$138.00

Provider:

Griffin Securities, Inc.

Date:

26 Jul 2013

Pages:

14

Type:

AcrobatPDF

Companies referenced:

PMTC.OQ

Available for Immediate Download
Summary:

We are reducing our FY13 and FY14 estimates, and initiating a FY15 estimate. Organic license revenues, excluding Servigistics, declined in 3Q13, and will likely do so again in 4Q13, though some recovery may occur by 1Q14. PTC has been doing well in containing cost & expenses, and thereby expanding margins. There should be some further margin expansion into FY14, though the rate of year/year basis point improvement could begin to flatten out. PTC’s 3Q13 revenues were below our estimate though non-GAAP earnings were in line. The active CAD base, its largest revenue item, has shown some volume growth, though there appears to be considerable pressure on new license ASPs. “Service lifecycle management” (SLM) is a differentiated growth opportunity, and Windchill is competitive in what should be a growing PLM market, including via large deals. While the EV/sales ratio is not particularly high relative to historical group valuations, we are maintaining our Neutral rating in light of the additionally reduced estimates.

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