PTC's Recent Transparency & Conservative Framework Change This Analyst's Tune To Positive Side

KeyBanc analyst Jason Celino upgraded PTC Inc PTC from Sector Weight to Overweight with a $155 price target.
The analyst acknowledged that the company's clear cloud strategy, growing capabilities, and LT commitment has helped drive share gains and enabled the company to maintain above-market growth in CAD and PLM for the past three years and will continue.
PTC has provided much transparency around its FY23 growth framework, laying out several scenarios impacting bookings and churns considering different macro conditions.
Based on checks, Celino believes demand is fairing better than this conservative framework and could drive new organic bookings growth of at least 5-10% throughout FY23.
Through a combination of durable growth opportunities in CAD and PLM, along with operational discipline, the analyst believes PTC could be a perennial +25% FCF grower through FY25.
Additionally, Celino believes execution and compounding of this growth could be the catalyst to drive +5-turns of multiple expansion toward premium Industrial software averages of 28-30x in FY24.
The analyst revised FY23 and FY24 estimates to incorporate the close of the ServiceMax acquisition.
Price Action: PTC shares traded higher by 3.49% at $134.49 on the last check Monday.

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