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Roper (ROP) to Report Q3 Earnings: Is a Beat in the Cards?

Roper Technologies, Inc. ROP is scheduled to report third-quarter 2020 results on Oct 27, before market open.

The company’s earnings beat expectations in the trailing four quarters, the average surprise being 5.44%. Notably, in the last reported quarter, earnings of $2.94 per share surpassed the Zacks Consensus Estimate of $2.67 by 10.11%.

In the past three months, the company’s shares have gained 3% compared with the industry’s growth of 10.7%.

Key Factors

Roper is likely to have benefited from strong momentum across the network software and medical products businesses in the third quarter. For instance, continued strength across the company’s DAT and ConstructConnect businesses are expected to have augmented its Network Software & Systems segment’s top-line performance. Notably, the Zacks Consensus Estimate for third-quarter revenues for the Network Software & Systems segment is pegged at $444 million, indicating a 5.2% increase from the previous quarter’s reported number.

For the Application Software segment, strength in the company’s laboratory software business, including Sunquest, Data Innovations and Clinisys, is likely to have aided revenues in the to-be-reported quarter. Also, solid booking for software products across Roper’s Deltek, Aderant and PowerPlan businesses amid the coronavirus outbreak is expected to have boosted the segment’s revenues in the quarter. The consensus mark for third-quarter revenues from the Application Software segment is pegged at $427 million, suggesting a 7.3% growth on a sequential basis.

Moreover, solid demand for medical products in its Verathon and IPA businesses along with improvement in the short-cycle industrial end markets is likely to have been a tailwind for the Measurement & Analytical Solutions segment. However, softness in the company’s other medical product businesses is likely to get reflected in the segment’s top-line performance. Notably, the consensus mark for Measurement & Analytical Solutions segment revenues stands at $369 million, implying a 1.4% sequential increase.

In addition, Roper’s unique niche market strategy, strong operational execution and cost-saving initiatives are likely to have helped it maintain a healthy margin performance amid the crisis.

However, persistent weakness in upstream oil and gas businesses is anticipated to have adversely impacted Roper’s Process Technologies segment in the third quarter. Notably, the consensus estimate for the Process Technologies segments’ revenues stands at $119 million, implying a 1.7% decrease on a sequential basis.

Earnings Whispers

Our proven model suggests an earnings beat for Roper this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of +0.53% as the Most Accurate Estimate is pegged at $3.03, higher than the Zacks Consensus Estimate of $3.01.

Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. price-eps-surprise | Roper Technologies, Inc. Quote

Zacks Rank: Roper carries a Zacks Rank #2.

Other Key Picks

Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:

Flowserve Corporation FLS has an Earnings ESP of +2.56% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

IDEX Corporation IEX has an Earnings ESP of +7.80% and a Zacks Rank #2.

ParkerHannifin Corporation PH has an Earnings ESP of +5.44% and a Zacks Rank of 2, at present.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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