Investment Research report

PTC Inc.

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PTC Inc.
The Accounting of Things
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Research Overview

S&P 500
Mar 23, 2017

After conducting a forensic financial and accounting review, Spruce Point believes that investors in PTC Inc (Nasdaq: PTC), a computer software company, have over-valued the company and overlooked such factors as its poorly executed subscription model transition, aggressive use of unsupportable non-GAAP financial measures, and over-hyped but underperforming Internet of Things (IoT) business. Based on our investigation, we estimate 50% to 60% downside risk. 

The report highlights several key concerns with the company, including:

  • We find a weak SaaS conversion masked by dubious “proprietary” metrics
  • We are unimpressed by the excessive promotion of the IoT roll-up story
  • Evidence that the recurring restructuring odyssey appears to be an elaborate accounting scheme to sell investors on non-GAAP figures
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