PTC · investment memo
PTC's own FY2026 guidance, reconciled through the opex bridge: revenue midpoint $2,720m x 84.0% gross margin = $2,285m gross profit, less operating expenses of $1,364m ('FY'26 GAAP operating expenses are expected to increase approximately 4%' on FY2025's filed $1,311,858,000), = $921m operating income = 33.9%. Set at 34.0%. Deliberately BELOW the TTM actual of 37.81% and the FY2025 actual of 35.86%, because both windows contain the Sep-2025 quarter at a 48.5% operating margin -- an ASC 606 renewal-cohort artefact, not an operating plateau. The trailing figure is not a margin, it is a phase of a recognition cycle.
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
A daily close below $119.94 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Not stated. This name has no falsifiable invalidation conditions on file, so it cannot be risk-monitored. That is a gap in the research, not a clean bill of health — recorded rather than hidden.
Cause: the ASC 606 cohort that inflated FY2025 does not repeat, and FY2027 laps it. FY2025 revenue grew 19% and operating margin +1030bp on "higher total value and longer average duration of contracts that commenced in the current year." Long-duration contracts recognised upfront do not recur until they renew. FY2026 is already guiding revenue −2% to 0% against that base. If FY2027 contract duration mean-reverts further while ARR compounds at 9%, reported revenue can fall again even as the business grows — and the market, which prices PTC on a 15.05x trailing EV/EBIT that was built on a $1,117