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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 $58.8 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.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and ROP perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the software application industry. ROP's strength lies in its diverse and high-quality software portfolio, focusing on SaaS and software maintenance for steady cash flow. Recent acquisitions of Procare and Transact have expanded its market presence in education and campus technology sectors, showcasing its strategic acquisitions capabilities and operational excellence. These acquisitions not only expanded its product offerings but also brought in a significant net present value tax benefit, positioning ROP as a leader in niche markets.
Despite its notable strength, ROP slipped 5.3% from its 52-week high of $580.09, achieved on Dec. 4. Over the past three months, ROP stock declined marginally, underperforming the S&P 500 Index’s ($SPX) 9.8% gains during the same time frame.
In the longer term, shares of ROP rose marginally on a YTD basis and climbed 2.4% over the past 52 weeks, underperforming SPX’s YTD gains of 26.5% and 31.1% returns over the last year.
To confirm the bearish trend, ROP has traded below its 50-day moving average recently. However, it has traded above its 200-day moving average since mid-August, with some fluctuations.
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.
In the competitive arena of software application, Cadence Design Systems, Inc. (CDNS)has taken the lead over ROP, showing resilience with a 11.2% uptick on a YTD basis and 16.5% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on ROP’s prospects. The stock has a consensus “Moderate Buy” rating from the 14 analysts covering it, and the mean price target of $602.42 suggests a potential upside of 9.6% from current price levels.
