The companies PTC and Rockwell Automation are closely connected, sharing end-market drivers in the industrial sector. PTC is currently performing better in terms of providing guidance and has a more resilient business model compared to Rockwell Automation.
PTC offers digital software solutions that help customers manage a product’s life cycle, while Rockwell Automation provides industrial automation technology and services. Both companies face challenges in their end markets, but PTC is on track to meet its financial targets for 2024, unlike Rockwell Automation.
PTC’s focus on growing recurring revenue and its disciplined approach to managing internal spending make it more resilient in a downturn compared to Rockwell Automation. Wall Street expects PTC to achieve higher free cash flow margins in the coming years, reflecting its asset-light business model.
Investors may consider buying PTC stock due to its financial flexibility and strong guidance track record. On the other hand, Rockwell Automation needs to demonstrate improved execution and maintain guidance before investors regain confidence in the stock.
Both companies operate in long-term growth markets, but Rockwell Automation needs to show a clear upward trend in orders before investors consider buying in. Rockwell’s management anticipates positive order growth in the upcoming third quarter, which will be a key indicator to watch.