Industrial software company PTC's (NASDAQ: PTC) latest results are likely to have divided opinion. Once again, they were in line with guidance but slightly disappointing in what many investors were expecting from the company. As such, the stock is increasingly testing the patience of many investors. Here's the lowdown.
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The case for buying PTC stock has long rested on a belief that the company would hit medium-term 2024 targets for free cash flow (FCF) of $700 million to $900 million. Unfortunately, the COVID-19 pandemic has pushed PTC toward the lower end of the target. Management expects to hit $700 million to $750 million in FCF in 2024; the midpoint would put PTC on a price-to-FCF valuation of less than 20 times FCF in 2024. That would be an excellent valuation for a company growing FCF at a 25% to 30% rate.
Source Fool.com