PTC Reports a Strong Finish to Its Fourth Quarter With Exceptional ARR; Maintaining FVE of $105

Narrow-moat PTC finished its fourth quarter of fiscal 2022 with results above our estimates for both the top and bottom line. We view the excellent strength in annualized recurring revenue, or ARR, and positive momentum building from the software-as-a-service, or SaaS, transition as serving a solid foundation for expansion over the next fiscal year. For fiscal 2023, management provided a more modest outlook due to anticipated currency and geopolitical headwinds; however, we remain confident that their robust demand base, sticky software, and recurring revenue model will offset constraints in the long term. With this, we maintain our fair value estimate of $105, and view the current share price of $120 as overvalued.