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Progress Software
(NASDAQ:PRGS)
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Rating:74Outperform
Price Target:
$49.00
▲(12.57% Upside)
Action:Reiterated
Date:07/23/26
PRGS scores well mainly on durable cash flow and solid profitability, supported by a strong technical uptrend. The score is held back by meaningful leverage (balance-sheet risk) and only modest underlying ARR/top-line growth despite raised guidance, with valuation appearing fair rather than clearly cheap.
Positive Factors
Recurring revenue and customer retention
A large recurring-revenue base and 100% net retention support visibility and customer stickiness. These characteristics can sustain renewals and cross-selling, although future growth depends on expanding ARR beyond its current modest pace.
Negative Factors
Elevated leverage limits financial flexibility
Despite recent repayments, substantial debt relative to equity and reliance on the revolver leave less flexibility if growth slows or financing costs rise. Leverage may also constrain investment and increase execution risk around acquisitions.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue and customer retention
A large recurring-revenue base and 100% net retention support visibility and customer stickiness. These characteristics can sustain renewals and cross-selling, although future growth depends on expanding ARR beyond its current modest pace.
Read all positive factors
Progress Software Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
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The Fly
The FlyProgress Software (PRGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.78B
Dividend YieldN/A
Average Volume (3M)857.00K
Price to Earnings (P/E)20.8
Beta (1Y)0.67
Revenue Growth15.50%
EPS Growth56.73%
CountryUS
Employees2,801
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.09
Shares Outstanding41,012,943
10 Day Avg. Volume583,639
30 Day Avg. Volume857,001
Financial Highlights & Ratios
PEG Ratio3.25
Price to Book (P/B)3.77
Price to Sales (P/S)1.84
P/FCF Ratio7.86
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$54.75Price Target Upside25.78% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)6.16
Revenue Forecast (FY)$997.49M
Progress Software Business Overview & Revenue Model
Company Description
Progress Software Corporation (PRGS) specializes in providing technology solutions that enable businesses to create, launch, and oversee their software applications. The company's extensive product suite includes: OpenEdge, a powerful development ...
How the Company Makes Money
Progress makes money primarily by licensing and subscribing enterprise customers to its software products and charging ongoing maintenance and support. A substantial portion of revenue is recurring, coming from (1) subscription-based software (tim...
Progress Software Earnings Call Summary
Earnings Call Date:Jun 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 29, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial update: Progress exceeded expectations across revenue, EPS, margins, and free cash flow in Q2, raised full-year guidance, improved collections, and continued deleveraging while highlighting strong product momentum (notably the data platform and AI-related wins such as the NVIDIA Chef partnership). Key risks and constraints were also clearly acknowledged — ARR growth remains modest at 2% pro forma, total leverage is still significant (~2.9x), some of the quarter's outperformance was timing-driven, and a portion of cash flow gains reflected one-time collection improvements. Management signaled disciplined capital allocation, opportunistic M&A appetite, and confidence in continued execution. Overall, positives (outperformance, margin and cash generation, balance sheet improvement, product momentum and raised guidance) outweigh the negatives (modest ARR growth, substantial absolute debt, and some timing-driven variability).Positive Updates
Revenue Growth Exceeded Expectations
Q2 revenue of $253 million, up 7% year-over-year, and exceeded the high end of guidance for the quarter.
Negative Updates
High Absolute Leverage and Debt Load
Total debt remained substantial at ~$1.3 billion with net debt around ~$1.2 billion; revolver drawn $850 million and $450 million of convertible notes remain due 2030 — leverage improved but remains material at ~2.9x.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth Exceeded Expectations
Q2 revenue of $253 million, up 7% year-over-year, and exceeded the high end of guidance for the quarter.
Read all positive updates
Company Guidance
Progress updated its near‑term outlook, forecasting Q3 revenue of $244–$250 million and Q3 EPS of $1.53–$1.59; for full‑year FY26 it raised guidance to revenue of $990 million to just over $1.0 billion (≈1%–2.5% growth vs. FY25), an operating margin of ~39%, adjusted free cash flow of $271–$283 million, unlevered free cash flow of $323–$334 million, and EPS of $6.09–$6.21 (up $0.18 from prior guidance). The full‑year guidance assumes a 20% tax rate, roughly $75 million of share repurchases, about $220 million of net debt repayment, ~42 million weighted shares outstanding, and implies an expected revolver draw of ~$740 million and a net leverage ratio of ~2.8x.Progress Software Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
55
Neutral
Cash Flow
80
Positive
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.00B | 977.83M | 753.41M | 694.44M | 602.01M | 531.31M |
| Gross Profit | 795.31M | 790.25M | 622.93M | 567.86M | 507.52M | 452.86M |
| EBITDA | 287.09M | 158.71M | 229.32M | 213.58M | 207.78M | 168.56M |
| Net Income | 89.04M | 73.13M | 68.44M | 70.20M | 95.07M | 78.42M |
Balance Sheet | ||||||
| Total Assets | 2.35B | 2.46B | 2.53B | 1.60B | 1.41B | 1.36B |
| Cash, Cash Equivalents and Short-Term Investments | 102.98M | 94.81M | 118.08M | 126.96M | 256.28M | 157.37M |
| Total Debt | 1.33B | 850.99M | 1.56B | 747.11M | 640.59M | 591.35M |
| Total Liabilities | 1.84B | 1.98B | 2.09B | 1.14B | 1.01B | 951.05M |
| Stockholders Equity | 506.08M | 478.35M | 438.79M | 459.71M | 398.50M | 412.49M |
Cash Flow | ||||||
| Free Cash Flow | 305.22M | 229.49M | 206.29M | 168.35M | 186.07M | 173.88M |
| Operating Cash Flow | 313.71M | 235.19M | 211.49M | 173.92M | 192.16M | 178.53M |
| Investing Cash Flow | -28.51M | -26.92M | -857.91M | -360.38M | 21.99M | -250.34M |
| Financing Cash Flow | -284.28M | -238.37M | 640.82M | 51.19M | -101.42M | 132.11M |
Progress Software Technical Analysis
Positive
43.53
Price Trends
38.88
Positive
34.20
Positive
36.89
Positive
Market Momentum
1.31
Positive
58.62
Neutral
38.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRGS, the sentiment is Positive. The current price of 43.53 is above the 20-day moving average (MA) of 42.87, above the 50-day MA of 38.88, and above the 200-day MA of 36.89, indicating a bullish trend. The MACD of 1.31 indicates Positive momentum. The RSI at 58.62 is Neutral, neither overbought nor oversold. The STOCH value of 38.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRGS.
Progress Software Risk Analysis
Progress Software disclosed 37 risk factors in its most recent earnings report. Progress Software 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
Progress Software Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $3.65T | 27.58 | 33.22% | 0.77% | 17.79% | 31.42% | |
78 Outperform | $8.63B | 27.79 | 17.29% | ― | 15.24% | ― | |
75 Outperform | $34.40B | 30.38 | 14.15% | ― | 17.82% | 5490.04% | |
74 Outperform | $1.78B | 20.83 | 18.16% | ― | 15.50% | 56.73% | |
65 Neutral | $2.84B | -256.33 | 16.36% | ― | 20.90% | 37.46% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $416.98B | 25.06 | 50.59% | 1.74% | 17.35% | 32.98% |
* Technology Sector Average
PRGS
Progress Software
43.53
-2.78
-6.00%
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Progress Software Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Progress Software to Acquire Domo’s AI Data Platform
Positive
Jul 22, 2026
On July 22, 2026, Progress Software entered into an asset purchase agreement to acquire Domo’s AI and Data Platform Business, including substantially all related assets, employees and liabilities, for a cash consideration of about $400 milli...
Business Operations and StrategyStock BuybackFinancial Disclosures
Progress Software boosts Q2 results and outlook
Positive
Jun 30, 2026
Progress Software reported solid results for its fiscal second quarter ended May 31, 2026, with revenue rising 7% year over year to $253 million and annualized recurring revenue increasing 2% to $868 million. GAAP operating margin improved to 18%,...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.