PTC Inc. (NASDAQ:PTC) traded at around $194 on October 7, little changed on the day and 4.32% lower over twelve months.
Autodesk, Inc. (NASDAQ:ADSK) traded near $235 over the same session, down 25.73% across the year. One of these two received a $22.6 billion cash bid last week and is still below where it traded a year ago.
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The Company Being Bought Is the One That Shrank:
Revenue fell 6.80% at PTC in the most recent quarter while Autodesk grew 16.10%. Earnings tell the same story, down 16.00% against up 57.20%.
So Schneider Electric agreed to pay $22.6 billion in cash for the design software company whose revenue is going backwards.
Gross margins run 92.50% at Autodesk against 84.50% at PTC, which is the usual gap between a subscription base and a licensed one. Operating margins are close at 29.23% against 28.23%, so the difference is being spent rather than kept. Return on equity is 53.85% at Autodesk against 35.05%, and neither figure is held back by the operations. In January we ranked ten stocks for high returns. The one we put first has returned almost 30% since.
One Margin at PTC Does Not Come From Software:
Net margin at PTC is 41.43% and operating margin is 28.23%. Net margin above operating margin means profit arrived from below the operating line rather than from selling licences. The multiples carry the distortion. PTC trades at 18.72 times trailing earnings and 21.71 times forward.
A forward figure above the trailing one says this year’s profit is not expected to repeat, which is the same fact stated as a forecast. Autodesk moves the other way, from 29.98 times trailing to 16.55 times forward. Return on assets is 11.54% at PTC against 11.47% at Autodesk, so the two use their asset bases almost identically.
Free cash flow settles the quality question. Autodesk generated $2.80 billion against $935.48 million at PTC. In May, we ranked this year’s best dividend performers. The one that finished first has since fallen 38%.
The Valuation Case:
Sustainability for PTC is now a question for its acquirer rather than for the market, since the price is agreed. On price, Autodesk is the cheaper stock on forward estimates at 16.55 times against 21.71, with a PEG ratio of 0.78 against 1.81.
Enterprise value to EBITDA is closer at 17.45 for PTC against 21.29, because that measure counts the $1.61 billion of debt. Short interest of 9.21% at PTC against 4.45% is unusual for a company with an agreed cash offer on the table.
Conclusion:
Autodesk is the better business by every operating measure that matters. Revenue grew 16.10% against a 6.80% decline, earnings rose 57.20% against a 16.00% fall, and free cash flow of $2.80 billion is three times PTC’s. However, PTC has an agreed $22.6 billion cash offer and Autodesk has nothing of the kind, which is why one fell 4.32% over twelve months and the other 25.73%. PTC’s 41.43% net margin above a 28.23% operating margin is not repeatable. The number to watch is Autodesk’s forward multiple, because 16.55 times is what the market pays for the grower nobody bid for.
Market Sentiment:
PTC Inc. was held by 45 hedge funds with a combined stake value of about $1.01 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 42 hedge fund holders with a cumulative investment value of around $1.06 billion in the previous quarter.
Autodesk, Inc. was held by 51 hedge funds with a combined stake value of about $2.28 billion at the end of Q2 2026 in the Insider Monkey database. This is down from 67 hedge fund holders with a cumulative investment value of around $3.17 billion in the previous quarter.
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This article is originally published at Insider Monkey.
