DCF Studio

    PTC · NMS · Technology

    PTC Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 77.13

    Market price

    USD 135.89

    Implied upside

    -43.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedReported capital expenditure averages just 0.88% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 5.99% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 77.13-43.2%
    Exit multiple
    USD 141.74+4.3%
    Market price
    USD 135.89

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 3.1bnUSD 3.5bnUSD 3.9bnUSD 4.4bnUSD 4.9bn+12.3%
    EBITUSD 837.1mUSD 940.2mUSD 1.1bnUSD 1.2bnUSD 1.3bn+12.3%
    NOPATUSD 663.9mUSD 745.6mUSD 837.5mUSD 940.6mUSD 1.1bn+12.3%
    Add depreciation & amortisationUSD 184.2mUSD 206.9mUSD 232.4mUSD 261.0mUSD 293.1m+12.3%
    Less capital expenditureUSD -184.2mUSD -206.9mUSD -232.4mUSD -261.0mUSD -293.1m+12.3%
    Less increase in working capitalUSD 18.7mUSD 21.0mUSD 23.6mUSD 26.5mUSD 29.8m-12.3%
    Free cashflow to firmUSD 682.6mUSD 766.7mUSD 861.1mUSD 967.1mUSD 1.1bn+12.3%
    Discount factor0.95370.86740.78890.71750.6526-
    Present valueUSD 651.0mUSD 665.0mUSD 679.3mUSD 693.9mUSD 708.9m+2.2%
    Present Value Of The ForecastUSD 3.4bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta1.001Reported 1.002, pulled toward 1.0 (Blume)
    Cost of equity10.51%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 14.7bn91.5% of capital
    Total debtUSD 1.4bn8.5% of capital, book value as a proxy
    Tax rate20.7%Effective, capped at statutory
    WACC9.95%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 77.13

    68% of EV

    Forecast FCFF, final year
    USD 1.1bn
    Capex at depreciation, working capital in reinvestment
    USD 1.1bn
    Less reinvestment at g/ROIC (25.1% of NOPAT)
    USD -265.4m
    Capitalised
    USD 791.0m
    ROIC (reported)
    10.0%
    Terminal value, undiscounted
    USD 10.9bn
    Terminal value, discounted
    USD 7.1bn
    Enterprise value
    USD 10.5bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 9.3bn

    Exit at 14.1x EBITDA

    Value per shareUSD 141.74

    81% of EV

    Terminal value, undiscounted
    USD 22.8bn
    Terminal value, discounted
    USD 14.9bn
    Enterprise value
    USD 18.3bn
    Less net debt
    USD 1.2bn
    Equity value
    USD 17.1bn

    Spread between methods: 59%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.95%102.54104.60106.99109.80113.17
    8.95%87.8188.7489.7690.9192.22
    9.95%76.5576.8477.1377.4277.70
    10.95%68.4868.7368.9869.2469.49
    11.95%61.7862.0062.2262.4462.66

    Outlined: this model. Green text: above today's price of 135.89. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year12.3%26.0%+13.6pp
    EBIT margin27.2%45.8%+18.6pp
    Discount rate9.9%6.8%-3.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.