- BMO Capital Markets analyst Daniel Jester initiated coverage on PTC Inc (NASDAQ:PTC) at Outperform rating with a price target of $166.
- The analyst is bullish on PTC’s acquisition of the field service management software provider, ServiceMax, in January 2023.
- The company announced the $1.46 billion acquisition in November 2022, which is expected to be accretive to PTC’s SaaS ARR and cash flow in 2023.
- Jester thinks the buyout provides PTC with a strong closed-loop product lifecycle solution portfolio. He expects the company’s strong PLM solution Windchill business to unlock robust cross-sale opportunities and drive ServiceMax growth.
- The analyst estimates revenues of $2.12 billion and adjusted EPS of $4.44 (consensus: $4.37) in FY23.
- For FY24, Jester sees revenues of $2.38 billion and adjusted EPS of $5.30 (consensus: $5.21).
- Also, the analyst expects an FCF margin of ~30% and ARR growth of ~13.0% y/y in FY24, both slightly above consensus.
- Last month, the company announced Q2 FY 23 revenues of $542 million, beating the consensus of $539 million, and adjusted EPS of $1.16 exceeded the street estimates of $1.14.
- Price Action: PTC shares are trading lower by 0.74% at $129.89 on the last check Wednesday.
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