Roper Technologies, Inc. ROP is witnessing persistent strength in its Deltek, Vertafore, Strata and Aderant businesses under the Application Software segment, driven by growing adoption of SaaS solutions and continued GenAI innovation. Solid momentum in its ConstructConnect business and robust bookings in the iPipeline business have also been driving the performance of the Network Software segment. In the second quarter of 2024, organic revenues from the Application Software and Network Software segments increased 5% and 2% year over year, respectively.
The solid performance of the Neptune business is supported by the continued demand for ultrasonic metes. The increasing adoption of meter data management software is fostering growth of the Technology enabled Products segment. The segment’s organic revenues grew 5% in the second quarter. For 2024, the company expects total revenues to increase 12% from the year-ago level while organic revenues are projected to rise 6%.
The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. In February 2024, ROP completed the acquisition of Procare Solutions, which is expected to expand its software offerings in the education sector. The buyout of Syntellis Performance Solutions in August 2023 strengthened its Strata Decision Technology business.
Also, in August 2024, Roper entered into a deal to acquire Transact Campus for $1.5 billion. The inclusion of Transact’s expertise in campus technology and payment solutions will enable ROP to boost its CBORD business. Acquisitions boosted sales 8% in the second quarter.
Roper remains focused on increasing its shareholders’ wealth through dividend payouts. For instance, in the first six months of the current year, it paid out dividends worth $160.6 million, reflecting an increase of 10.9% year over year. It’s worth noting that in November 2023, the company hiked its quarterly dividend by 10%.
ROP Stock’s Price Performance
In the past six months, this Zacks Rank #3 (Hold) company has gained 0.8% against the industry’s 1.1% decline.
Image Source: Zacks Investment Research
However, the company has been dealing with rising costs and expenses. In the first half of 2024, its cost of sales increased 11.8% year over year while selling, general and administrative (SG&A) expenses rose 12%. Also, in 2023, its cost of sales and SG&A expenses climbed 15.5% and 15%, respectively, on a year-over-year basis. Higher costs related to the amortization of acquired assets are pushing up operating expenses.
Despite improvement, supply-chain constraints also continue to be a challenge for Roper. Some of the company’s rf IDEAS product businesses are subject to supply-chain challenges.
High debt levels are an added concern for Roper. At the end of the second quarter, it had a long-term debt (net of the current portion) of $6.92 billion. Its current portion of long-term debt (net) totaled almost $500 million, higher than its cash equivalents of $251.5 million.
Stocks to Consider
Some better-ranked stocks from the same space are discussed below.
Unisys Corporation UIS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
UIS delivered a trailing four-quarter average earnings surprise of 87.7%. In the past 30 days, the Zacks Consensus Estimate for Unisys’ 2024 earnings has remained stable at 24 cents per share.
Cerence Inc. CRNC currently carries a Zacks Rank #2 (Buy). CRNC delivered a trailing four-quarter average earnings surprise of 83.6%.
In the past 60 days, the Zacks Consensus Estimate for Cerence’s fiscal 2024 earnings has remained unchanged at 92 cents per share.
ServiceNow, Inc. NOW presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for NOW’s 2024 earnings has been stable at $13.75 per share.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Roper Technologies, Inc. (ROP) : Free Stock Analysis Report
Unisys Corporation (UIS) : Free Stock Analysis Report
ServiceNow, Inc. (NOW) : Free Stock Analysis Report
Cerence Inc. (CRNC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
