PRGSProgress Software program$54.26 +0.02 (+0.04%) (As of 06/28/2024 ET)52-Week Vary$48.00▼$62.34Dividend Yield1.29percentP/E Ratio33.09Price Goal$63.14
Progress Software program NASDAQ: PRGS is a expertise firm throughout the methods software program sub-industry. The inventory reached its 2024 low on Jun. 20, when it was down almost 11% yr up to now. The agency reported its second-quarter monetary outcomes on Jun. 25, 2024, and is again within the inexperienced, now up virtually 2% on the yr. The agency’s outcomes impressed the market, with the inventory taking pictures up almost 13% on the day following the discharge. Let’s discover Progress Software program’s merchandise, current monetary outcomes, and outlook to grasp whether or not it is a title to contemplate including.
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The agency’s 2023 annual monetary report, or Type 10-Ok, supplies descriptions of 12 totally different software program merchandise the agency presents. The agency’s predominant merchandise enable software program builders to create, deploy, and handle their purposes extra effectively. It additionally supplies software program that permits safe file switch and an answer that permits information sharing between totally different purposes. Among the most notable merchandise embody Progress OpenEdge, Progress Chef, and Progress Developer Instruments. Many of those merchandise are AI-powered.
The agency monetizes these merchandise primarily by perpetual licenses, which permit using the software program indefinitely. It additionally presents renewable time period licenses on some merchandise and a subscription mannequin for its cloud-based choices. Together with its licenses, the agency additionally supplies product upkeep that offers entry to software program updates and technical assist. Purchasers of perpetual licenses have the choice, however not the requirement, so as to add upkeep assist. The agency really makes the vast majority of its revenues from its upkeep providers. 58% of complete income got here from this stream in 2023.
Progress doesn’t establish any direct opponents in its annual submitting, however some firms that supply related merchandise embody Amazon (NASDAQ: AMZN), Microsoft NASDAQ: MSFT, and Oracle NYSE: ORCL.
Progress Software program’s Spectacular Monetary Outcomes: Surpassing Expectations
Outcomes surpassed expectations on many fronts. Second-quarter revenues have been $175 million, beating out the $170 million steerage midpoint and the $169 million consensus estimate. Earnings per share (EPS) additionally beat expectations, coming in at $1.09, properly above the steerage midpoint and consensus estimate of $0.95.
Different important measures shined as properly. Annual recurring income (ARR) was $579 million. This measures the worth of all contractually binding agreements the agency has in place. Contracts present a dependable income, ensured by their authorized binding. About 83% of the agency’s complete income comes from yearly recurring sources. The Internet Retention Price was 99%, which measures the agency’s capacity to resume or exchange annual recurring income.
Days Gross sales Excellent (DSO) has additionally been constantly enhancing. DSO measures what number of days it takes to transform gross sales bought on credit score into money. DSO was at 50 days in Q2 2023 and dropped to 44 days in Q1 2024. It fell once more to 41 days in Q2 2024. This exhibits the agency is getting paid by clients quicker and is constantly turning into extra succesful in that space. Lastly, adjusted free money circulation grew by 33% from Q2 2023. General, this was a formidable report from Progress.
Progress Software program’s Steering and Outlook: Elevated 2024 Income and EPS Projections
Not solely did Progress present spectacular backward-looking outcomes, but it surely additionally raised its future expectations. The corporate raised its fiscal yr 2024 income steerage by $3 million and elevated its EPS by 5 cents. Analysts are bullish on the inventory, with 5 purchase scores and two holds.
The typical value forecast sits at $63.14, implying a 15% upside. The agency has a projected earnings development charge of 9%, on the low facet relative to its {industry}.
General MarketRank™3.98 out of 5 Analyst RatingModerate Purchase Upside/Downside16.4% Upside Quick InterestBearish Dividend StrengthModerate Sustainability-0.67 Information Sentiment0.56 Insider TradingSelling Shares Projected Earnings Growth9.09% See Full Particulars
Within the agency’s quarterly earnings convention name, executives detailed the initiatives the agency is pursuing going ahead. These embody additional integrating generative AI into its merchandise and utilizing AI internally to optimize the corporate’s operations.
The agency can be actively concerned in M&A exercise. It’s presently conducting due diligence on the potential acquisition of Irish software program firm MariaDB.
Progress Software program’s current earnings report was spectacular, however the modest implied upside and projected development are regarding. Nevertheless, the agency has made a behavior of constantly beating its estimates, so it is potential it could do a lot better than analysts count on over the long run.Earlier than you think about Oracle, you will wish to hear this.MarketBeat retains monitor of Wall Avenue’s top-rated and finest performing analysis analysts and the shares they suggest to their shoppers every day. MarketBeat has recognized the 5 shares that prime analysts are quietly whispering to their shoppers to purchase now earlier than the broader market catches on… and Oracle wasn’t on the listing.Whereas Oracle presently has a “Average Purchase” score amongst analysts, top-rated analysts imagine these 5 shares are higher buys.View The 5 Shares Right here Market downturns give many buyers pause, and for good purpose. Questioning easy methods to offset this danger? Click on the hyperlink under to be taught extra about utilizing beta to guard your self.Get This Free Report
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