Why are we writing up PTC again? Because the business has reinvented itself, but the market does not see it yet. PTC is an attractive digitisation play. Not only has PTC undergone a digital transformation itself, but it is also an enabler of digital transformation within manufacturing / industry 4.0.
We think PTC should be a core holding.
We see an energised, innovative organisation, industry tailwinds such as IoT, augmented reality, and a transition to SAAS which expands the market.
Multiple products hitting an inflection point on the S-curve in the next 2-4 years.
We would argue that high ROI and critical digital transformations are first in line to reaccelerate giving PCT a cyclical tailwind in 2021/ 2022.
We see a high probability that our upside scenario of ~19%pa ARR growth over the next 5 years will be closer to the mark, versus company guidance of mid-teens growth, and a street further below that.
Potential Upside: $249 (+92%)
Sensible Downside: $98 (-25%)
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