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Roper Technologies (ROP)
NASDAQ:ROP
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Roper Technologies
(NASDAQ:ROP)
78Outperform
Positive Factors
Acquisitions
Roper has $5 billion in capital to deploy in an attractive M&A environment, with software valuations at a low point, presenting an opportunity for growth.
Financial Performance
Roper maintains an investment-grade credit rating, providing a sustainable cost-of-capital advantage relative to other potential acquirers, leading to outsized cash returns.
Organic Growth
Roper is well-positioned to sustain its history of strong FCF growth through its disciplined acquisition activity and accelerating organic growth within its software and networks businesses.
Negative Factors
Economic Uncertainty
As economic and policy uncertainty increase, the ROP story incrementally resonates.
Growth Outlook
Deltek's organic growth outlook has been lowered by 1-2 percentage points due to exposure to federal government contractors and current cost-cutting initiatives.
Market Valuation
Current valuation is attractive at 19x CY26 EV/EBITDA, which is about a 15% discount compared to serial acquirer peers.
Roper Technologies (ROP) vs. S&P 500 (SPY)
Market Cap
$62.67B
Dividend Yield0.54%
Average Volume (3M)658.46K
Price to Earnings (P/E)42.0
Beta (1Y)0.63
Revenue Growth13.34%
EPS Growth1.98%
CountryUS
Employees18,200
SectorTechnology
Sector Strength77
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)4.78
Shares Outstanding107,515,396
10 Day Avg. Volume550,307
30 Day Avg. Volume658,460
Financial Highlights & Ratios
PEG Ratio-12.04
Price to Book (P/B)3.19
Price to Sales (P/S)0.00
P/FCF Ratio26.66
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.21
Enterprise Value/Gross Profit12.21
Enterprise Value/Ebitda5.66
Forecast
1Y Price Target
$645.08Price Target Upside11.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Roper Technologies Business Overview & Revenue Model
Company DescriptionRoper Technologies, Inc. is a diversified technology company that operates in various sectors including medical and scientific imaging, RF technology, software information solutions, and industrial technology. The company is known for its innovative approach and focuses on acquiring and managing businesses that design and develop products and solutions across niche markets. Roper's core services and products span across healthcare, transportation, food, energy, and water industries, providing essential technology and software solutions to improve operational efficiency and productivity.
How the Company Makes MoneyRoper Technologies generates revenue primarily through the sale of software, engineered products, and various technology solutions across its four main business segments: Application Software, Network Software & Systems, Measurement & Analytical Solutions, and Process Technologies. The company follows a business model that emphasizes acquiring niche technology businesses with strong cash flow and growth potentials. Revenue streams include licensing fees, subscription services, product sales, and maintenance and support services. Roper leverages significant partnerships and customer relationships to enhance its earnings, focusing on high-value, recurring revenue models, particularly in its software divisions. The company's strategic acquisitions are a critical driver of revenue growth, allowing Roper to expand its portfolio and market reach.
Roper Technologies Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales across different business units, indicating which areas are contributing most to growth and where there might be opportunities or risks.
Breaks down sales across different business units, indicating which areas are contributing most to growth and where there might be opportunities or risks.
Data provided by:
Main Street Data
Main Street DataRoper Technologies Financial Statement Overview
Summary
Roper Technologies is in a solid financial position, marked by consistent revenue and profit growth, efficient operations, and a stable balance sheet. While debt levels warrant monitoring, the company's strong cash flow and profitability metrics suggest it is well-equipped to manage its obligations and pursue growth opportunities. The industrial machinery sector's cyclical nature should be considered, but Roper's financials indicate resilience and potential for continued success.Income Statement
Roper Technologies demonstrates strong profitability with a consistent increase in gross profit margin, reaching 68.9% in the TTM period. The net profit margin is solid at 20.7% TTM, indicating effective cost management. Revenue growth is robust, with a 17.2% increase from 2023 to 2024 and a 2.9% growth in the TTM period. EBIT and EBITDA margins reflect operational efficiency, standing at 28.2% and 36.7% TTM, respectively. Overall, Roper's income statement shows a strong upward trajectory in revenue and profitability.88
Very Positive
Balance Sheet
The company's balance sheet reflects a stable financial position. The debt-to-equity ratio is moderate at 0.39 TTM, suggesting manageable leverage. Return on equity is impressive at 7.8% TTM, indicating effective use of shareholder funds. The equity ratio is healthy at 61.2% TTM, showing a strong capital structure. However, the total debt level has increased slightly, which could pose a risk if not monitored.75
Positive
Cash Flow
Roper's cash flow is strong, with a substantial operating cash flow to net income ratio of 1.59 TTM, highlighting efficient cash generation relative to profitability. The free cash flow to net income ratio is favorable at 1.54 TTM, indicating good cash retention. Although free cash flow growth has seen minor fluctuations, the overall cash flow management remains robust and supports ongoing operations and potential investments.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.24B | 7.04B | 6.18B | 5.37B | 5.78B | 5.53B | Gross Profit |
| 4.99B | 4.88B | 4.31B | 3.75B | 3.92B | 3.54B | EBIT |
| 2.04B | 2.00B | 1.75B | 1.52B | 1.48B | 1.43B | EBITDA |
| 2.66B | 3.04B | 2.66B | 2.12B | 1.95B | 1.78B | Net Income Common Stockholders |
| 1.50B | 1.55B | 1.38B | 985.60M | 1.15B | 949.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 372.80M | 188.20M | 214.30M | 792.80M | 351.50M | 308.30M | Total Assets |
| 31.42B | 31.33B | 28.17B | 26.98B | 23.71B | 24.02B | Total Debt |
| 7.46B | 7.67B | 6.37B | 6.66B | 7.92B | 9.57B | Net Debt |
| 7.08B | 7.48B | 6.16B | 5.87B | 7.57B | 9.26B | Total Liabilities |
| 12.20B | 12.47B | 10.72B | 10.94B | 12.15B | 13.54B | Stockholders Equity |
| 19.22B | 18.87B | 17.44B | 16.04B | 11.56B | 10.48B |
| Cash Flow | Free Cash Flow | ||||
| 2.30B | 2.33B | 1.93B | 664.30M | 1.95B | 1.48B | Operating Cash Flow |
| 2.39B | 2.39B | 2.04B | 734.60M | 2.01B | 1.53B | Investing Cash Flow |
| -1.74B | -3.47B | -2.13B | 1.21B | -142.90M | -6.07B | Financing Cash Flow |
| -475.20M | 1.07B | -499.50M | -1.47B | -1.81B | 4.14B |
Roper Technologies Technical Analysis
Positive
580.47
Price Trends
566.77
Positive
558.85
Positive
552.95
Positive
Market Momentum
4.32
Negative
57.69
Neutral
81.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROP, the sentiment is Positive. The current price of 580.47 is above the 20-day moving average (MA) of 566.44, above the 50-day MA of 566.77, and above the 200-day MA of 552.95, indicating a bullish trend. The MACD of 4.32 indicates Negative momentum. The RSI at 57.69 is Neutral, neither overbought nor oversold. The STOCH value of 81.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROP.
Roper Technologies Risk Analysis
Roper Technologies disclosed 23 risk factors in its most recent earnings report. Roper Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Roper Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $65.72B | 53.08 | 28.29% | 0.19% | 10.01% | 47.87% | |
78 Outperform | $73.64B | 22.12 | 107.62% | 2.35% | -1.85% | 12.04% | |
78 Outperform | $62.67B | 42.04 | 8.09% | 0.54% | 13.34% | 1.98% | |
76 Outperform | $86.94B | 26.19 | 27.16% | 0.96% | -0.23% | 22.41% | |
70 Outperform | $46.08B | 16.64 | 27.78% | 2.13% | -0.39% | 47.31% | |
68 Neutral | $34.84B | 38.91 | 25.86% | 1.66% | -11.19% | -22.50% | |
60 Neutral | $11.58B | 10.33 | -7.23% | 2.94% | 7.47% | -10.84% |
* Technology Sector Average
Performance Comparison
ROP
Roper Technologies
580.47
37.24
6.86%
CMI
Cummins
336.65
57.88
20.76%
ITW
Illinois Tool Works
251.71
6.97
2.85%
PH
Parker Hannifin
679.28
136.90
25.24%
ROK
Rockwell Automation
308.20
41.86
15.72%
HWM
Howmet Aerospace
166.24
82.43
98.35%
Roper Technologies Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 4.08%|
Next Earnings Date:Jul 18, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a strong financial performance, successful acquisition, and increased revenue guidance, indicating a positive outlook. However, there were challenges in specific segments and macroeconomic uncertainties affecting some parts of the business.Q1-2025 Updates
Positive Updates
Strong Financial Performance in Q1 2025
Roper Technologies reported a 12% increase in total revenue, 5% organic growth, and a 12% increase in cash flow over the last 12 months.
Successful Acquisition of CentralReach
The acquisition was completed for $1.65 billion, net of a $200 million tax benefit. CentralReach is expected to deliver $175 million in revenue and $75 million in EBITDA by June 2026, with continued revenue and EBITDA growth of 20%.
Increased Full-Year Revenue Guidance
Roper raised its full-year total revenue growth outlook from 10% to approximately 12% due to a strong start to the year and the CentralReach acquisition.
Robust Capital Deployment Capability
Roper Technologies has more than $5 billion of available firepower for capital deployment over the next 12 months, positioning the company well for future acquisitions.
Application Software Segment Growth
This segment saw a 19% total revenue growth and a 6% organic growth, with EBITDA margins improving by 110 basis points.
Negative Updates
Challenges in Network Software Segment
Organic revenue growth in the Network Software segment was only 1% due to difficult prior year comparisons at MHA and the lingering effects of the actors and writers strike on Foundry.
Soft Free Cash Flow in Q1 2025
Free cash flow in Q1 was down 1% compared to the prior year due to a legal settlement and timing of bond coupon payments.
Uncertainty in Government Contracting
Deltek, which relies significantly on federal government contractors, faces uncertainty due to government budget issues, potential shutdowns, and the current macro environment.
Impact of Tariffs
The TEP segment faces potential exposure to tariffs, although most cross-border flows are USMCA compliant.
Company Guidance
During the Roper Technologies conference call on April 28, 2025, the company announced a robust financial performance for the first quarter. Total revenue grew by 12%, with organic revenue increasing by 5% and cash flow growing by 12% over the last 12 months. The acquisition of CentralReach, a cloud-native software provider for ABA therapy, was highlighted, with expectations of $175 million in revenue and $75 million in EBITDA for the TTM period ending June 2026. The company's gross retention rate stood at 95%, and its free cash flow conversion rate was about 30%. Roper raised its full-year total revenue guidance and modestly increased its debts outlook, reaffirming its position with over $5 billion available for capital deployment in the coming 12 months.Roper Technologies Corporate Events
Executive/Board ChangesShareholder Meetings
Roper Technologies Board Member Announces Retirement
Neutral
Apr 14, 2025
On April 8, 2025, Christopher Wright announced his retirement from Roper Technologies‘ Board of Directors, effective at the 2025 Annual Meeting of Shareholders on June 10, 2025. Wright, who has been a director since 1991, is stepping down without any disagreements with the company, leading to a reduction of the board size to nine directors.
Spark’s Take on ROP Stock
According to Spark, TipRanks’ AI Analyst, ROP is a Outperform.
Roper Technologies scores well due to its strong financial performance and positive earnings call, highlighting significant cash flow and revenue growth. Technical analysis supports a positive price trend, although valuation concerns arise from a high P/E ratio. The company’s strategic focus on acquisitions and organic growth provides confidence in future performance, despite some segment challenges and restructuring costs.
To see Spark’s full report on ROP stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.