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Reasons Why Roper (ROP) Deserves to be in Your Portfolio Now
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Roper Technologies, Inc. (ROP - Free Report) stands to benefit from strength across its businesses, acquisitions and focus on operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
It has a market capitalization of $57.6 billion. Over the past month, ROP has gained 6%, almost in line with the industry’s growth of 6.1%. The stock currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Roper has been witnessing strength across each of its segments. The company’s Application Software segment is benefiting from strength across its Deltek, Vertafore, Strata and Aderant businesses. Strong momentum in the ConstructConnect business and excellent bookings in the iPipeline business have been supporting the Network Software segment’s growth. Strength across the Neptune and Verathon businesses augurs well for the Technology Enabled Products segment.
Driven by strength across its businesses, Roper expects total revenues to increase 12% from the year-ago levels in 2024. Organic revenues are estimated to rise 6% in the year.
Acquisition Benefits: The company intends to strengthen and expand its businesses through buyouts. In February 2024, it acquired Procare Solutions for $1.75 billion. The buyout will expand Roper’s software offerings in education sector.
The company’s acquisition of Syntellis Performance Solutions (in August 2023) strengthened its Strata Decision Technology business. Also, the acquisition of Replicon (in August 2023) has been supporting Deltek’s growth by boosting its SaaS solutions portfolio. Acquisitions boosted sales by 6% in the first quarter of 2024.
Shareholder-Friendly Policies: ROP is focused on rewarding shareholders through dividend payouts. In the first quarter of 2024, it rewarded its shareholders with a dividend payment of $80.5 million, up 11.3% year over year. In November 2023, the company also hiked its dividend by 10%.
Despite the positives, escalating costs and expenses have been a concern for ROP over time. In the first quarter of 2024, its cost of sales increased 10.8% year over year while selling, general and administrative expenses rose 13.3%. Escalating costs, if not controlled, may impede the company’s bottom line.
Nutanix delivered a trailing four-quarter average earnings surprise of 72.3%. In the past 60 days, the Zacks Consensus Estimate for NTNX’s fiscal 2024 earnings has increased 0.9%.
Vertiv Holdings delivered a trailing four-quarter average earnings surprise of 24.2%. In the past 60 days, the Zacks Consensus Estimate for VRT’s 2024 earnings has risen 3%.
SecureWorks delivered a trailing four-quarter average earnings surprise of 79.6%. In the past 30 days, the Zacks Consensus Estimate for SCWX’s fiscal 2025 earnings has remained stable.
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Reasons Why Roper (ROP) Deserves to be in Your Portfolio Now
Roper Technologies, Inc. (ROP - Free Report) stands to benefit from strength across its businesses, acquisitions and focus on operational excellence. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
It has a market capitalization of $57.6 billion. Over the past month, ROP has gained 6%, almost in line with the industry’s growth of 6.1%. The stock currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Let’s delve into the factors that have been aiding the firm for a while now.
Business Strength: Roper has been witnessing strength across each of its segments. The company’s Application Software segment is benefiting from strength across its Deltek, Vertafore, Strata and Aderant businesses. Strong momentum in the ConstructConnect business and excellent bookings in the iPipeline business have been supporting the Network Software segment’s growth. Strength across the Neptune and Verathon businesses augurs well for the Technology Enabled Products segment.
Driven by strength across its businesses, Roper expects total revenues to increase 12% from the year-ago levels in 2024. Organic revenues are estimated to rise 6% in the year.
Acquisition Benefits: The company intends to strengthen and expand its businesses through buyouts. In February 2024, it acquired Procare Solutions for $1.75 billion. The buyout will expand Roper’s software offerings in education sector.
The company’s acquisition of Syntellis Performance Solutions (in August 2023) strengthened its Strata Decision Technology business. Also, the acquisition of Replicon (in August 2023) has been supporting Deltek’s growth by boosting its SaaS solutions portfolio. Acquisitions boosted sales by 6% in the first quarter of 2024.
Shareholder-Friendly Policies: ROP is focused on rewarding shareholders through dividend payouts. In the first quarter of 2024, it rewarded its shareholders with a dividend payment of $80.5 million, up 11.3% year over year. In November 2023, the company also hiked its dividend by 10%.
Despite the positives, escalating costs and expenses have been a concern for ROP over time. In the first quarter of 2024, its cost of sales increased 10.8% year over year while selling, general and administrative expenses rose 13.3%. Escalating costs, if not controlled, may impede the company’s bottom line.
Other Key Picks
We have highlighted three other top-ranked stocks, namely Nutanix, Inc. (NTNX - Free Report) , Vertiv Holdings Co (VRT - Free Report) and SecureWorks Corp. (SCWX - Free Report) . While Nutanix sports a Zacks #1 Rank (Strong Buy), Vertiv Holdings and SecureWorks carry a Zacks Rank of 2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nutanix delivered a trailing four-quarter average earnings surprise of 72.3%. In the past 60 days, the Zacks Consensus Estimate for NTNX’s fiscal 2024 earnings has increased 0.9%.
Vertiv Holdings delivered a trailing four-quarter average earnings surprise of 24.2%. In the past 60 days, the Zacks Consensus Estimate for VRT’s 2024 earnings has risen 3%.
SecureWorks delivered a trailing four-quarter average earnings surprise of 79.6%. In the past 30 days, the Zacks Consensus Estimate for SCWX’s fiscal 2025 earnings has remained stable.