PTC (PTC:NAS) Fundamental Valuation Report

Fundamental Valuation Report

PTC(PTC:NAS)

Technology:Software-Application

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$84.82 (USD) 26/11/2018

Weighted Valuation
$100.77 (USD)

Overall Rating
Undervalued by 18.8%

Valuation Models Analyst Consensus: $114.33 (USD)
(in order of importance) Discounted Cash Flow: $80.41 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (PTC:NAS USD)

Price 84.82
Range 84.17 – 85.58
52 week 59.46 – 106.19
Open 85.42
Vol / Avg. 1.26M/1.31M
Mkt cap 10.07B
P/E 192.77
Div/yield 0.00/0.00
EPS 0.44
Shares 118.68M
Beta 1.55

Company Description

PTC Inc, formerly known as Parametric Technology Corp., was founded in Massachusetts in 1985 as a CAD software provider. Over the years, the company expanded into product and service lifecycle management, and more recently, it entered the burgeoning Internet of Things market. The firm generates over $1 billion in revenue per year and derives this total from a balanced geographic mix. PTC has approximately 6,000 employees, about 35% of whom are based in the United States.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for PTC:NAS

Using a discounted cash flow model we generated an intrinsic value of $80.41 (USD) for PTC:NAS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

PTC:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $80.41 1% 5% 1% 5%
WACC (or Ke) 11.89 $92.04 $71.15
Terminal Growth Rate 3.00 $72.50 $90.33
Tax Rate -0.81 $82.72 $78.11
Cash Flow 580,760,571 $76.16 $84.66
Capital Expenditures -28,715,400 $80.27 $80.56
Long Term Debt 778,125,000 $80.74 $80.09

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $51.71 (USD) for PTC:NAS. We also generated a valuation of $77.61 (USD) using other metrics and comparables.
The comparable companies were Aspen Technology (AZPN:NAS), CDK Global (CDK:NAS), Cadence Design Systems (CDNS:NAS), Trade Desk (TTD:NAS) and Tyler Technologies (TYL:NYS).

Company PTC:NAS End Date Value
Earnings/Share $0.44 (USD)
Book Value/Share $7.07 (USD)
Sales/Share $10.38 (USD)
Cash Flow/Share $1.83 (USD)
EBITDA/Share $1.33 (USD)
Price Based on Comps Adjustment Factor (%)
$23.22 (USD) 0.0
$81.73 (USD) -29.3
$95.47 (USD) -22.0
$69.21 (USD) -42.9
$44.10 (USD) 56.5
PTC:NAS Ratios Used Average Values AZPN:NAS CDK:NAS CDNS:NAS TTD:NAS TYL:NYS
171.69 PE Ratio 52.77 42.02 20.59 53.70 99.64 47.89
11.65 PB Ratio 11.56 12.70 0.00 10.00 17.75 5.78
7.94 PS Ratio 9.19 12.64 3.44 6.06 14.51 9.31
45.09 PCF Ratio 40.85 30.77 16.96 20.93 99.16 36.43
62.31 EV to EBITDA 33.04 30.84 13.38 25.34 58.83 36.80

Multiples

Using a multiples approach we generated a valuation of  $52.63 (USD) for PTC:NAS

Company PTC:NAS End Date Value
Earnings/Share $0.44 (USD)
Book Value/Share $7.07 (USD)
Sales/Share $10.38 (USD)
Cash Flow/Share $1.83 (USD)
EBITDA/Share $1.33 (USD)
Price Based on Comps Adjustment Factor
$26.30 (USD) 0
$43.05 (USD) 0
$44.62 (USD) 0
$56.43 (USD) 0
$92.75 (USD) 0
Ratios Ratio Average
PE Ratio 59.77
PB Ratio 6.09
PS Ratio 4.30
PCF Ratio 30.88
EV to EBITDA 69.47

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  PTC:NAS for the last 10 years was  6.01

We ran the Adjusted Book Value for  PTC:NAS and generated a book value of  $7.41 (USD)
By multiplying these we get an adjusted valuation of  $44.58 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for PTC:NAS. The 3 analysts have a concensus valuation for PTC:NAS for 2019 of $114.33 (USD).

PTC:NAS PTC

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 1 0 4.5000 Outperform 2018-11-23

Current Price: 84.82 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 1.57 2.51 3.79
# EPS Analysts 3 3 2
Mean Revenue 1,305.10 1,486.50 1,781.00
# Revenue Analysts 3 3 2
Mean Target Price 114.33
Mean Cash Flow 2.13 3.88 5.11
Mean EBITDA 264.50 341.00
Mean Net Income 178.40 293.90 444.00
Mean Debt Outstanding
Mean Tax Rate 18.40 18.40 18.40
Mean Growth Rate 33.82
Mean Capital Expenditure 31.20 31.60

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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