PTC Inc.
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
PTC sells the software manufacturers use to design products and keep their engineering record: Creo and Onshape for CAD, Windchill and Arena for product lifecycle management (PLM), Codebeamer for application lifecycle management and ServiceMax for field service. Windchill holds the engineering bill of materials and change history that manufacturing systems draw from, which makes it hard to remove, but Siemens and Dassault sell the same record and PTC's own displacement wins show it can be migrated. On October 4, 2026 PTC agreed to be acquired by Schneider Electric for $205 a share in cash.
PTC's edge is holding the engineering record a manufacturer builds from, in a market where two larger rivals hold the same kind of record for other manufacturers:
- Windchill Is Where the Bill of Materials Lives: In a Windchill shop, the engineering bill of materials, part revisions and change orders are released from PLM into ERP and manufacturing, so downstream systems take their parts list from it. Replacing it means re-validating years of configuration history, which is why PTC assumes churn stays low in its guidance. But Siemens Teamcenter and Dassault ENOVIA do the same job, and PTC's CEO said in Q3 FY2026 that the aggregate value of its competitive displacements doubled year over year, so the record moves when a customer decides to consolidate.
- CAD Seats Are the Exposed Layer: Creo and Onshape are sold to engineers, and their stickiness is training and file history. AI design assistants from PTC, Autodesk, Siemens and start-ups can operate CAD through APIs; PTC itself says API calls to Onshape from AI start-ups tripled in recent months. That helps usage, but it makes the interface less of a moat over time.
- Why a Hardware Company Paid Up: Schneider Electric already owns AVEVA for process industries and agreed to buy Cognite in June 2026. Jefferies' Lucas Ferhani said the deal closes the PLM gap in Schneider's portfolio and improves its position in discrete manufacturing. Schneider expects €250 million of annual cost synergies by year three and about €800 million of revenue synergies, and says the price is 21× 2027 EV/adjusted EBITA before synergies and 13× including them. The price reflects what PTC is worth inside Schneider, which is more than the market paid for it alone.
Moat Verdict
PTC's AI-resilient pillars are all intact: Windchill holds a product record that manufacturing systems take their parts lists from, but Siemens and Dassault hold the same record elsewhere, and PTC's own displacement wins show it can be moved. The AI-vulnerable layer is CAD, where design assistants working through APIs erode the trained-user lock. Schneider's $205 offer prices the synergies of closing its PLM gap, not a category-defining moat.
65.0 resilient · 65.0 vulnerable · 80/20 = 65.0 · = 65
Open a moat to read its note.
Creo users carry decades of modelling habits and file history, and retraining a design team costs months. AI assistants that drive CAD through APIs reduce that cost: PTC says AI start-ups tripled their Onshape API calls in recent months. Rockwell is strong on the same kind of habit because ladder logic runs live production lines that maintenance staff must edit on the floor. CAD work is done at a desk, which is where an AI assistant can take over the interface. The habit is real but no longer category-defining.
Customers encode their own change processes, part numbering and approval rules in Windchill and Codebeamer. That is switching cost built from customer configuration rather than vendor logic a rival cannot copy, the same bar as Procore and Atlassian.
PTC's data is customers' own product data, rated under proprietaryData. It does not depend on access to a public dataset.
PTC's moat rests on its installed base and product record, not on specialists. Talent is not what keeps customers.
CAD, PLM, ALM and SLM are sold as an 'intelligent product lifecycle' suite, and Creo plus Windchill is the common pairing. PTC discloses no attach or cross-sell rate, so the bundle is intact rather than strong.
Windchill holds decades of part, revision and change history across thousands of manufacturers, which PTC's AI features draw on. The data belongs to each customer and can be migrated, as PTC's own competitive displacement wins show, so it is intact rather than strong.
Medical-device and aerospace makers validate their PLM system for FDA and defence configuration-management rules, and re-validating a replacement is costly. Siemens Teamcenter and Dassault ENOVIA hold the same validations, so the barrier keeps entrants out but not peers.
Windchill and Onshape are used inside each manufacturer and with its suppliers, but suppliers work in whatever system each customer picks. There is no free-collaborator loop that pulls new customers in, unlike Procore's unlimited subcontractor seats, so there is no network effect to rate.
Engineering change orders, part releases and service work orders run through Windchill, Codebeamer and ServiceMax every day. No money moves through PTC, and the embedding is the same fact as the product record, so it is intact.
Windchill is the release point for the engineering bill of materials that ERP and manufacturing systems take parts lists from, and PTC's Q3 FY2026 guidance assumes churn remains low. But Siemens Teamcenter and Dassault ENOVIA hold the same record at other manufacturers, and PTC's CEO said in Q3 FY2026 that the aggregate value of its competitive displacements doubled year over year, which shows records in this market can be moved. Intact, not category-defining.
Software at near-zero marginal cost. Scale shows up in data, bundling and the record, which are rated there.
Manufacturers choose PTC on fit with their CAD history and PLM installed base, which other pillars rate. The name does not carry a price premium of its own.
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
PTC sells the software manufacturers use to design products and keep their engineering record: Creo and Onshape for CAD, Windchill and Arena for product lifecycle management (PLM), Codebeamer for application lifecycle management and ServiceMax for field service. Windchill holds the engineering bill of materials and change history that manufacturing systems draw from, which makes it hard to remove, but Siemens and Dassault sell the same record and PTC's own displacement wins show it can be migrated. On October 4, 2026 PTC agreed to be acquired by Schneider Electric for $205 a share in cash.
Growth Score
Q3 FY2026 (quarter to June 30, 2026) constant-currency ARR excluding the divested Kepware and ThingWorx businesses rose 9.1% to $2.448 billion, with $60 million of net new ARR. Revenue fell 7% to $600 million because of license-term timing under ASC 606, which is why PTC steers on ARR. FY2026 guidance was raised to 9–9.5% constant-currency ARR growth and about $850 million of free cash flow, and the CFO said deferred ARR booked for FY2027 is about double last year's, pointing to low double-digit growth next year. PTC bought back about $525 million of stock in Q3. FY2025 constant-currency ARR grew 8.5% and free cash flow was $857 million (+16%). On October 4, 2026 PTC agreed to be acquired by Schneider Electric for $205 a share in cash, with closing expected in Q3 2027.
Valuation Score
At the $192.26 close on October 5, 2026, PTC trades about 6% below Schneider Electric's $205 cash offer, which is expected to close in Q3 2027. The ladder is a deal ladder. The base of $200 weights the $205 offer at about 90% and a standalone value near $140 at about 10%. The bear of $140 is the deal breaking. The bull of $220 needs a higher bid. The stock sits about 87% of the way from bear to base, so most of the remaining return is the deal spread.
The Product Record, Shared Three Ways
PTC's edge is holding the engineering record a manufacturer builds from, in a market where two larger rivals hold the same kind of record for other manufacturers:
- Windchill Is Where the Bill of Materials Lives: In a Windchill shop, the engineering bill of materials, part revisions and change orders are released from PLM into ERP and manufacturing, so downstream systems take their parts list from it. Replacing it means re-validating years of configuration history, which is why PTC assumes churn stays low in its guidance. But Siemens Teamcenter and Dassault ENOVIA do the same job, and PTC's CEO said in Q3 FY2026 that the aggregate value of its competitive displacements doubled year over year, so the record moves when a customer decides to consolidate.
- CAD Seats Are the Exposed Layer: Creo and Onshape are sold to engineers, and their stickiness is training and file history. AI design assistants from PTC, Autodesk, Siemens and start-ups can operate CAD through APIs; PTC itself says API calls to Onshape from AI start-ups tripled in recent months. That helps usage, but it makes the interface less of a moat over time.
- Why a Hardware Company Paid Up: Schneider Electric already owns AVEVA for process industries and agreed to buy Cognite in June 2026. Jefferies' Lucas Ferhani said the deal closes the PLM gap in Schneider's portfolio and improves its position in discrete manufacturing. Schneider expects €250 million of annual cost synergies by year three and about €800 million of revenue synergies, and says the price is 21× 2027 EV/adjusted EBITA before synergies and 13× including them. The price reflects what PTC is worth inside Schneider, which is more than the market paid for it alone.
Moat Verdict
PTC's AI-resilient pillars are all intact: Windchill holds a product record that manufacturing systems take their parts lists from, but Siemens and Dassault hold the same record elsewhere, and PTC's own displacement wins show it can be moved. The AI-vulnerable layer is CAD, where design assistants working through APIs erode the trained-user lock. Schneider's $205 offer prices the synergies of closing its PLM gap, not a category-defining moat.
65.0 resilient · 65.0 vulnerable · 80/20 = 65.0 · = 65
Open a moat to read its note.
Creo users carry decades of modelling habits and file history, and retraining a design team costs months. AI assistants that drive CAD through APIs reduce that cost: PTC says AI start-ups tripled their Onshape API calls in recent months. Rockwell is strong on the same kind of habit because ladder logic runs live production lines that maintenance staff must edit on the floor. CAD work is done at a desk, which is where an AI assistant can take over the interface. The habit is real but no longer category-defining.
Customers encode their own change processes, part numbering and approval rules in Windchill and Codebeamer. That is switching cost built from customer configuration rather than vendor logic a rival cannot copy, the same bar as Procore and Atlassian.
PTC's data is customers' own product data, rated under proprietaryData. It does not depend on access to a public dataset.
PTC's moat rests on its installed base and product record, not on specialists. Talent is not what keeps customers.
CAD, PLM, ALM and SLM are sold as an 'intelligent product lifecycle' suite, and Creo plus Windchill is the common pairing. PTC discloses no attach or cross-sell rate, so the bundle is intact rather than strong.
Windchill holds decades of part, revision and change history across thousands of manufacturers, which PTC's AI features draw on. The data belongs to each customer and can be migrated, as PTC's own competitive displacement wins show, so it is intact rather than strong.
Medical-device and aerospace makers validate their PLM system for FDA and defence configuration-management rules, and re-validating a replacement is costly. Siemens Teamcenter and Dassault ENOVIA hold the same validations, so the barrier keeps entrants out but not peers.
Windchill and Onshape are used inside each manufacturer and with its suppliers, but suppliers work in whatever system each customer picks. There is no free-collaborator loop that pulls new customers in, unlike Procore's unlimited subcontractor seats, so there is no network effect to rate.
Engineering change orders, part releases and service work orders run through Windchill, Codebeamer and ServiceMax every day. No money moves through PTC, and the embedding is the same fact as the product record, so it is intact.
Windchill is the release point for the engineering bill of materials that ERP and manufacturing systems take parts lists from, and PTC's Q3 FY2026 guidance assumes churn remains low. But Siemens Teamcenter and Dassault ENOVIA hold the same record at other manufacturers, and PTC's CEO said in Q3 FY2026 that the aggregate value of its competitive displacements doubled year over year, which shows records in this market can be moved. Intact, not category-defining.
Software at near-zero marginal cost. Scale shows up in data, bundling and the record, which are rated there.
Manufacturers choose PTC on fit with their CAD history and PLM installed base, which other pillars rate. The name does not carry a price premium of its own.
Growth Analysis
Growth Drivers
Key Risk
If constant-currency ARR growth slips below 8% in FY2027, Siemens and Dassault would be winning the PLM consolidation deals PTC now claims, and AI design tools would be cutting into Creo seats. A failed Schneider deal is a price risk and is carried in the valuation bear, not here.
Score Derivation
72.1 base − 5 risk = 67
Base 72 (9.5% midpoint of 8–11%) + 0 trajectory (ARR growth steady at 8.5–9.5% for two years) + 0 margin (FY2026 free cash flow guide of ~$850M is flat with FY2025's $857M after the divestitures) − 5 moderate risk (deal break or PLM displacement) = 67
Price Scenarios (12–24 Months)
Valuation Analysis
The bear of $140 is close to PTC's pre-deal price: it closed at $144.03 on October 2, 2026, and the offer is a 46.1% premium to the 30-day volume-weighted average, which puts that average near $140. At $140, PTC's enterprise value is about $16.5B, roughly 19× FY2026 free cash flow of about $850M, in line with where the market priced it before the bid. The base of $200 is about 90% × $205 plus 10% × $140 ($198.50), rounded up. Closing is expected in Q3 2027, 9–12 months away, inside the scenario horizon. The 90% is a judgment, not a sourced figure: the deal is unanimous on both boards and has no financing condition, and the main risk is CFIUS. The market implies something close to it. Before time value, the $192.26 price implies about an 80% chance of closing, but discounting $205 by about a year at roughly 5% gives about $195, and on that basis the implied probability is above 90%. The bear credits no fee from Schneider, because the 8-K describes only the $700M PTC would owe. The bull of $220 assumes a modest bump or a rival bid. Neither is likely: there is no go-shop, PTC owes Schneider a $700M fee if it walks for a better offer, and Siemens or Dassault would face antitrust review. At $205, Schneider pays about 28× FY2026 free cash flow. $200.
Where We Are vs Targets
Loading live price…
The deal fails on CFIUS, antitrust or a Schneider shareholder revolt, and PTC trades back to its standalone value of about 19× free cash flow.
- CFIUS objects to a French owner of Windchill, which runs configuration management at US defence contractors
- Schneider's financing (about €16–17B of new debt and €5–6B of equity) meets resistance after its shares fall on the announcement
- Standalone constant-currency ARR growth holds near 9%, so the market prices PTC where it did before the bid, about $140
The deal closes on schedule in Q3 2027 at $205, and the stock trades at a probability-weighted discount to the offer until then.
- PTC shareholders approve and HSR clears without remedies
- CFIUS clears with mitigation, such as ring-fencing US defence programmes
- Weighting $205 at about 90% and $140 at about 10% gives $200
A rival bidder or a Schneider sweetener lifts the price about 7% above the current offer.
- Another strategic buyer sees the same PLM gap in discrete manufacturing and bids
- A sweetened offer clears the $700M termination fee a rival would have to cover
- About 30× FY2026 free cash flow supports $220