PTC Inc. (PTC) shares rallied 33.5% in the last trading session to close at $192.26. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.1% gain over the past four weeks.
The increase in share price can be attributed primarily to Schneider Electric's announcement of a definitive agreement to acquire the company. Schneider Electric will acquire PTC for $205 per share in cash. That represents a 42.3% premium to PTC's $144.03 closing price on Friday. The transaction values PTC's equity at about $22.6 billion and its enterprise value at roughly $23.7 billion. PTC
The deal is Schneider Electric's largest acquisition and is aimed at strengthening its industrial software, digital-thread and AI capabilities. Schneider expects €250 million of cost synergies and approximately €800 million of revenue synergies by leveraging the two companies' complementary customer bases and AI-enabled industrial offerings. With shares now trading close to the offer price, further gains could depend largely on the successful completion of the transaction and any potential changes to the deal terms.
For the fourth quarter of fiscal 2026, PTC estimates revenues in the $630-$690 million band. Non-GAAP EPS is projected in the range of $1.63 to $2.21. Cash from operations is expected to be around $29 million. Free cash flow is forecasted to be roughly $15 million, with the year-over-year decline primarily reflecting capital gains tax outflows from the Kepware and ThingWorx sale.
Driven by an encouraging fiscal fourth quarter outlook, PTC lifted the midpoint of its fiscal 2026 revenue and non-GAAP EPS guidance to $2.69-$2.75 billion and $7.87-$8.42, respectively. The prior view was $2.58 billion to $2.82 billion and between $6.65 and $8.9 per share.
This product development software maker is expected to post quarterly earnings of $2.01 per share in its upcoming report, which represents a year-over-year change of -42.1%. Revenues are expected to be $661.37 million, down 26% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For PTC Inc., the consensus EPS estimate for the quarter has been revised 1.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PTC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
PTC Inc. is a member of the Zacks Computer - Software industry. One other stock in the same industry, Manhattan Associates (MANH), finished the last trading session 0.6% higher at $205.45. MANH has returned -4.5% over the past month.
Manhattan Associates' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.45. Compared to the company's year-ago EPS, this represents a change of +6.6%. Manhattan Associates currently boasts a Zacks Rank of #4 (Sell).
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This article originally published on Zacks Investment Research (zacks.com).