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Sarasota, Florida-based Roper Technologies, Inc. (ROP) designs and develops software, and technology enabled products and solutions. With a market cap of $60.5 billion, the company offers industrial controls, fluid handling, pumps, medical and scientific devices, analytical instrumentation products, radio frequency identification (RFID) communication technology, and software solutions.
Shares of this industrial equipment maker have underperformed the broader market over the past year. ROP has gained 7.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.8%. In 2024, ROP’s stock rose 3.5%, compared to the SPX’s 25.8% rise on a YTD basis.
Narrowing the focus, ROP’s underperformance is apparent compared to the SPDR S&P Software & Services ETF (XSW). The exchange-traded fund has gained about 44.3% over the past year. Moreover, the ETF’s 29% gains on a YTD basis outshine the stock’s single-digit returns over the same time frame.
On Oct. 23, ROP shares closed down more than 1% after reporting its Q3 results. Its adjusted EPS of $4.62 surpassed Wall Street expectations of $4.53. The company’s revenue was $1.8 billion, exceeding Wall Street forecasts of $1.7 billion. For Q4, ROP expects its adjusted EPS to range from $4.70 to $4.74. The company expects full-year adjusted EPS to be between $18.21 and $18.25.
For the current fiscal year, ending in December, analysts expect ROP’s EPS to grow 9.2% to $18.24 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 14 analysts covering ROP stock, the consensus is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
The configuration is consistent over the past three months.
On Oct. 24, Jefferies Financial Group Inc. (JEF) maintained a “Buy” rating on ROP with a $635 price target, implying a potential upside of 12.5% from current levels.
The mean price target of $607.08 represents a 7.6% premium to ROP’s current price levels. The Street-high price target of $666 suggests an upside potential of 18%.
