Parametric Technology Earnings Preview

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Parametric Technology (NAS: PMTC) beat estimates by one cent last quarter and investors are hoping it can beat them again. The company will unveil its latest earnings on Wednesday, Jan. 25. Parametric Technology develops, markets, and supports product development software solutions and related services that help companies design products, manage product information, and improve their product development processes.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Parametric Technology, with nine of 11 rating it a buy and the remainder rating it a hold. Analysts don't like Parametric Technology as much as competitor Mentor Graphics overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $313.8 million in revenue this quarter. That would represent a rise of 17.7% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.22 per share. Estimates range from $0.20 to $0.23.

What our community says:
CAPS All-Stars are solidly behind the stock with 100% granting it an "outperform" rating. The community at large concurs with the All-Stars with 79.5% giving it a rating of "outperform." Fools are keen on Parametric Technology, though the message boards have been quiet lately with only 23 posts in the past 30 days. Parametric Technology's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q4

Q3

Q2

Q1

Gross Margin

71.0%

69.0%

69.6%

67.7%

Operating Margin

15.1%

8.4%

9.0%

6.4%

Net Margin

11.1%

5.3%

7.1%

5.0%

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