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Progress Software
(NASDAQ:PRGS)
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Rating:59Neutral
Price Target:
$38.00
▼(-12.70% Downside)
Action:Reiterated
Date:10/02/26
PRGS scores moderately due to strong cash flow generation and a supportive earnings update (raised FY2026 guidance, strong margins and EPS/FCF performance). These positives are tempered by clearly bearish technicals (price below key moving averages and negative MACD) and fundamental risk signals around leverage and the sharp TTM revenue decline.
Positive Factors
Strong Cash Generation
Strong operating and free cash flow provide internally generated funding for product investment, debt reduction, and customer support. High conversion versus net income also indicates earnings quality, giving Progress resilience and strategic flexibility over the next several quarters.
Negative Factors
Elevated Leverage
Higher leverage leaves Progress with less balance-sheet flexibility to absorb execution setbacks or fund additional growth investments. It also increases exposure to financing costs and makes capital allocation more constrained, particularly while the company integrates a debt-funded acquisition.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Strong operating and free cash flow provide internally generated funding for product investment, debt reduction, and customer support. High conversion versus net income also indicates earnings quality, giving Progress resilience and strategic flexibility over the next several quarters.
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.
Data provided by:
The Fly
The FlyProgress Software (PRGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.59B
Dividend Yield1.2%
Average Volume (3M)631.76K
Price to Earnings (P/E)17.8
Beta (1Y)0.73
Revenue Growth6.36%
EPS Growth95.43%
CountryUS
Employees2,801
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)2.19
Shares Outstanding40,874,190
10 Day Avg. Volume848,464
30 Day Avg. Volume631,756
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 Cap1.93
Enterprise Value/Revenue3.07
Enterprise Value/Gross Profit3.85
Enterprise Value/Ebitda9.97
Forecast
1Y Price Target
$51.00Price Target Upside17.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)6.18
Revenue Forecast (FY)$1.04B
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 primarily makes money by licensing and subscribing its software products to enterprises, complemented by maintenance/support and professional services. Its key revenue streams typically include: (1) Subscription and term-based licensing r...
Progress Software Earnings Call Summary
Earnings Call Date:Sep 30, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jan 19, 2027
Earnings Call Sentiment Positive
The call was predominantly positive, featuring Q3 revenue in line with guidance, strong 43% operating margins, 13% EPS growth, substantial free cash flow improvement, debt paydown, customer expansion, and raised fiscal 2026 guidance. The principal challenges were expected Domo seat-based churn and services declines, temporary fiscal 2027 margin compression, acquisition-related interest expense, and potential slight pressure from a greater SaaS mix.Positive Updates
Solid Q3 ARR and Retention
ARR increased by more than 1% year over year on a constant-currency basis to approximately $873 million. Net retention was 99%, within the expected range of 99% to 100% and consistent with recent quarters.
Negative Updates
Expected Domo Seat-Based Churn
Management expects significant continued churn in Domo's seat-based business and plans to convert some remaining seat-based customers to consumption-based agreements or see them churn at renewal.
Read all updates
Q3-2026 Updates
Positive
Negative
Solid Q3 ARR and Retention
ARR increased by more than 1% year over year on a constant-currency basis to approximately $873 million. Net retention was 99%, within the expected range of 99% to 100% and consistent with recent quarters.
Read all positive updates
Company Guidance
For the fourth quarter of 2026, Domo will contribute approximately 2 months of activity, with revenue expected to be between $297 million and $305 million and earnings per share between $1.24 and $1.33; for the full year 2026, revenue is expected to be between $1.044 billion and $1.052 billion, operating margin 38%, adjusted free cash flow between $275 million and $283 million, unlevered free cash flow between $330 million and $338 million, and earnings per share between $6.15 and $6.23, assuming a tax rate of 20% and approximately 42 million weighted shares outstanding. Domo’s steady-state revenue is expected to stabilize in the range of $280 million to $290 million, and once fully integrated by the end of FY '27, Domo is expected to annually add well over $100 million of EBITDA; for fiscal 2027, Domo will likely run slightly below 30% operating margin as the synergies ramp, Progress’ overall operating margin could be compressed 100 to 200 basis points, with a Progress margin in the range of 38% to 39% potentially looking more like 36% to 37%, and incremental interest expense is expected to be approximately $21 million.Progress Software Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
45
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Nov 2025 | Nov 2024 | Nov 2023 | Nov 2022 | Nov 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 999.93M | 977.83M | 753.41M | 694.44M | 602.01M | 531.31M |
| Gross Profit | 796.59M | 790.25M | 622.93M | 567.86M | 507.52M | 452.86M |
| EBITDA | 307.86M | 304.20M | 229.32M | 213.58M | 207.78M | 178.93M |
| Net Income | 92.41M | 73.13M | 68.44M | 70.20M | 95.07M | 78.42M |
Balance Sheet | ||||||
| Total Assets | 2.30B | 2.46B | 2.53B | 1.60B | 1.41B | 1.36B |
| Cash, Cash Equivalents and Short-Term Investments | 113.65M | 94.81M | 118.08M | 126.96M | 256.28M | 157.37M |
| Total Debt | 1.27B | 850.99M | 1.56B | 747.11M | 640.59M | 591.35M |
| Total Liabilities | 1.77B | 1.98B | 2.09B | 1.14B | 1.01B | 951.05M |
| Stockholders Equity | 529.98M | 478.35M | 438.79M | 459.71M | 398.50M | 412.49M |
Cash Flow | ||||||
| Free Cash Flow | 319.15M | 229.49M | 206.29M | 168.35M | 186.07M | 173.88M |
| Operating Cash Flow | 328.27M | 235.19M | 211.49M | 173.92M | 192.16M | 178.53M |
| Investing Cash Flow | -9.69M | -26.92M | -857.91M | -360.38M | 21.99M | -250.34M |
| Financing Cash Flow | -300.87M | -238.37M | 640.82M | 51.19M | -101.42M | 132.11M |
Progress Software Technical Analysis
Positive
43.53
Price Trends
41.70
Negative
38.16
Positive
36.64
Positive
Market Momentum
-0.99
Negative
46.30
Neutral
51.59
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 39.43, above the 50-day MA of 41.70, and above the 200-day MA of 36.64, indicating a neutral trend. The MACD of -0.99 indicates Negative momentum. The RSI at 46.30 is Neutral, neither overbought nor oversold. The STOCH value of 51.59 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $4.02T | 30.06 | 33.22% | 0.68% | 17.79% | 31.42% | |
75 Outperform | $43.41B | 37.59 | 14.15% | ― | 17.82% | 5490.04% | |
73 Outperform | $6.94B | 19.88 | 18.42% | ― | 14.98% | 1765.75% | |
65 Neutral | $415.43B | 21.20 | 42.58% | 1.41% | 21.62% | 45.95% | |
62 Neutral | $2.79B | -259.53 | 16.36% | ― | 20.90% | 37.46% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $1.59B | 17.80 | 18.36% | 1.20% | 6.36% | 95.43% |
* Technology Sector Average
PRGS
Progress Software
38.99
-7.88
-16.81%
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Progress Software Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Progress Software lifts outlook after Domo AI acquisition
Positive
Sep 30, 2026
Progress Software reported fiscal third-quarter 2026 results for the period ended Aug. 31, 2026, with revenue slipping 2% year over year to $246 million but ARR edging up 1% to $873 million and GAAP operating margin improving to 19%. Diluted EPS r...
Business Operations and StrategyM&A Transactions
Progress Software Completes Domo AI and Data Acquisition
Positive
Sep 22, 2026
On September 22, 2026, Progress Software completed its $400 million acquisition of substantially all assets and employees of Domo’s AI and data platform business, along with certain liabilities, under an asset purchase agreement originally s...
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...
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.