Roper Technologies, Inc. ROP has been benefiting from strength across its businesses. The company’s Application Software segment is witnessing solid momentum in its Deltek, Vertafore, Strata and Aderant businesses. Strength in its ConstructConnect business and excellent bookings in the iPipeline business have been supporting the Network Software segment’s growth.
Robust demand for products and solutions across the Neptune and Verathon businesses augurs well for the Technology Enabled Products segment. 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. ROP’s acquisition of Procare Solutions (in February 2024) will expand its software offerings in the education sector. It acquired Syntellis Performance Solutions (in August 2023), which strengthened its Strata Decision Technology business.
Also, in August 2024, Roper inked 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 by 8% in the second quarter.
Management is committed to rewarding shareholders through dividend payouts. For instance, in the first six months of 2024, it paid out dividends worth $160.6 million, up 10.9% year over year. Also, in November 2023, the company hiked its dividend by 10%.
Price Performance of ROP
Image Source: Zacks Investment Research
In the past three months, this Zacks Rank #3 (Hold) company has gained 1.2% compared with the industry’s 4% growth.
However, rising costs and expenses have been a concern for ROP over time. In the first six months 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.
High debt levels raise financial obligations and are likely to drain Roper’s profitability. ROP exited the second quarter with 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.
Cerence Inc. CRNC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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 increased 15%.
ServiceNow, Inc. NOW presently sports a Zacks Rank of 1. 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 increased 2.2%.
Unisys Corporation UIS currently sports a Zacks Rank of 1. UIS delivered a trailing four-quarter average earnings surprise of 87.7%.
In the past 60 days, the Zacks Consensus Estimate for Unisys’ 2024 earnings has increased more than 100%.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>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
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