Autodesk, Inc. (ADSK – Get Rating) and PTC Inc. (PTC – Get Rating) are two prominent players in the software application industry. ADSK is a design software and services company that offers productive business solutions through technology products, and services focused on architecture, engineering, and construction (AEC), AutoCAD and AutoCAD LT, manufacturing (MFG), and media and entertainment (M&E) industries. On the other hand, PTC is a software and services company, which offers a portfolio of computer-aided design (CAD), product lifecycle management (PLM), application lifecycle management (ALM), and service lifecycle management (SLM) solutions that enable manufacturers to
The resurgence of COVID-19 cases owing to the discovery of a highly transmissible omicron variant is making companies and enterprises adopt the remote working structures once again. Moreover, the rising corporate investments and continued demand for efficient analysis should drive the software industry’s prospects. The global software market is expected to grow at a 7.2% CAGR and reach $823.71 billion by 2026. The investor optimism in the software industry is evident from the SPDR S&P Software & Services ETF’s (XSW) 5.3% returns year-to-date. So, both PTC and ADSK are expected to benefit.
While ADSK lost 16% over the past month, PTC has surged 0.9%. PTC is a clear winner with 1.9% gains versus ADSK’s negative returns in terms of its past year’s performance. But which of these stocks is a better pick now? Let us find out.
On December 16, 2021, ADSK announced its decision to acquire ProEst, a cloud-based estimating solution that enables construction teams to create estimates, perform digital takeoffs, generate detailed reports and proposals, and manage bid-day processes. The acquisition will strengthen ADSK’s Autodesk Construction Cloud’s preconstruction offerings and empower construction teams to manage their critical preconstruction and construction workflows on one platform.
On October 28, 2021, PTC announced the immediate availability of the new ThingWorx Digital Performance Management Solution (DPM). This first-of-its-kind offering represents a significant advancement in manufacturing companies’ ability to drive efficiency. DPM provides performance insights, enables real-time, closed-loop problem solving, and supports investment accountability by validating outcomes for transformational investments with real-time production data and easy-to-calculate financial improvements. This software marks a new phase in PTC’s IIoT growth strategy in enterprise solutions.
Recent Financial Results
ADSK’s total net revenues for its fiscal third quarter ended October 31, 2021, increased 18.2% year-over-year to $1.13 billion. The company’s gross profit came in at $1.02 billion, representing a 17.3% rise from the prior-year period. Its non-GAAP income from operations came in at $365 million, up 27.1% from the prior-year period. ADSK’s net income came in at $136.70 million, indicating a 3.4% year-over-year improvement. Its non-GAAP EPS increased 27.9% year-over-year to $1.33. The company had $1.75 billion in cash and cash equivalents as of October 31, 2021.
For its fiscal fourth quarter, ended September 30, 2021, PTC’s total revenue increased 22.9% year-over-year to $480.66 million. The company’s non-GAAP gross profit came in at $394.26 million, up 24% from the prior-year period. Its non-GAAP operating income came in at $176.14 million, indicating a 42.4% rise from the year-ago period. PTC’s non-GAAP net income came in at $130.57 million for the quarter, representing a 42.2% year-over-year improvement. Its non-GAAP EPS increased 41% year-over-year to $1.10. The company had $326.53 million in cash and equivalents as of September 30, 2021.
Past and Expected Financial Performance
ADSK’s total assets and levered free cash flow have grown at CAGRs of 31.2% and 59.6%, respectively, over the past three years. The company’s revenue has grown at a 20.9% CAGR over the past three years.
Analysts expect ADSK’s EPS to rise 24% year-over-year in the current year and 36.1% next year. Its revenue is expected to grow 15.3% year-over-year in the current year and 17.4% next year. The stock’s EPS is expected to increase at a 28.8% rate per annum over the next five years.
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