Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

33. PTC Inc. (NASDAQ:PTC)

Consensus ROE: 7%

Number of Hedge Fund Investors in Q2 2024: 39

PTC Inc. (NASDAQ:PTC) is a Boston based software company. Its products are geared towards a variety of different industries, such as retail, industrial, logistics, and software development. As a result, PTC Inc. (NASDAQ:PTC)’s is dependent on the broader economic health and outlook which is tied closely with the Fed’s interest rates. This makes it unsurprising that the stock is up. by 3.7% since the Fed cut rates by 50 basis points in September. Being a software firm also allows PTC Inc. (NASDAQ:PTC) to benefit from margin heavy recurring revenue, and despite the industrial slowdown in 2024, the firm’s fiscal Q3 saw it grow recurring revenue by 12% annually. Provided that PTC Inc. (NASDAQ:PTC)’s management aims to add $85 million in sequential new ARR in its Q4, the firm has to grow the share of high value deals in its portfolio. Any misses on this front could spell weakness.

Madison Investments mentioned PTC Inc. (NASDAQ:PTC) in its Q1 2024 investor letter. Here is what the fund said:

“PTC was one of our oldest portfolio holdings (~23 years!) and best performing stocks. We made our initial investment in PTC in 2001(in those days the company’s full name was Parametric Technology Corporation) after the dot com crash when the stock had an equity market value of approximately $1billion. We sold our final share near an equity market value of approximately $22billion. When we first initiated the investment position, we saw an attractively valued software company that provided very sticky, difficult to replace design software for engineers in the manufacturing sector. Over that 20-year span, PTC has grown both organically and through strategic M&A into one of the most vital design software engineering platforms in the world. Companies like BMW, Rockwell International, Medtronic, Hitachi, Boeing, Airbus, Volvo, Cannondale, Toyota, and GM all use PTC to design, collaborate and maintain the lifecycle of their franchise products and platforms. This investment illustrates not only the financial potential and opportunity of small cap investing but also our PMV process to identify and capitalize on strategic assets like PTC.”