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Roper Technologies (ROP) Down 9.7% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Roper Technologies (ROP - Free Report) . Shares have lost about 9.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Roper Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Roper Q4 Earnings Surpass Estimates, Revenues Miss
Roper delivered fourth-quarter 2019 positive earnings surprise of 1.5%. Adjusted earnings were $3.39 per share, surpassing the Zacks Consensus Estimate of $3.34. Also, the bottom line increased 5.3% from the year-ago quarter number of $3.22 backed by solid revenue growth.
In 2019, the company’s adjusted earnings were $13.05 per share, increasing 10% from the year-ago figure of $11.81.
Segmental Revenues
Roper’s net revenues were $1,394.8 million, up 1.3% year over year. Notably, adjusted revenues totaled $1,400 million, up 2% year over year. The rise was primarily driven by 1% organic growth and 1% gain from acquired assets. However, the top line missed the Zacks Consensus Estimate of $1,419 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below:
Application Software’s revenues totaled $410.8 million, representing 29.5% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 4.7%.
Network Software & Systems generated revenues of $425.8 million, accounting for roughly 30.5% of fourth-quarter revenues. Sales grew 19.8% year over year.
Measurement & Analytical Solutions generated revenues of $387.9 million, accounting for roughly 27.8% of the quarter’s top line. Sales declined 13.1% year over year.
Process Technologies generated revenues of $170.3 million, accounting for roughly 12.1% of the quarter’s revenues. Sales edged down 6.5% year over year.
Margin Details
In the October-December quarter, Roper’s cost of sales decreased 0.3% year over year to $501.9 million. Cost of sales was 35.9% of the quarter’s revenues compared with 36.6% a year ago. Adjusted gross profit increased 3% to $898 million, with margin of 64.1% reflecting expansion of 60 basis points (bps).
Selling, general and administrative expenses fell 2.8% to $494.5 million. It represented 35.3% of total revenues compared with 36.9% in the year-ago quarter. Operating profit improved 0.2% to $440.7 million with margin of 31.6%, down 40 bps year over year.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Roper had cash and cash equivalents of $709.7 million compared with $364.4 million recorded on Dec 31, 2018. Long-term debt declined 5.4% to $4,673.1 million from the end of 2018.
In 2019, the company generated net cash of $1,461.8 million from operating activities, up 2.2% year over year.
Capital expenditure during the fourth quarter totaled $10 million, lower than the year-ago figure of $15 million. Adjusted free cash flow in the quarter was up 1% to $453 million.
Outlook
For 2020, adjusted earnings per share are anticipated to be $13.30-$13.60, with organic revenue growth of 6-7%. For the first quarter of 2020, earnings are projected to be $2.94-$3.00 per share.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months. The consensus estimate has shifted -7.53% due to these changes.
VGM Scores
At this time, Roper Technologies has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Roper Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Roper Technologies (ROP) Down 9.7% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Roper Technologies (ROP - Free Report) . Shares have lost about 9.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Roper Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Roper Q4 Earnings Surpass Estimates, Revenues Miss
Roper delivered fourth-quarter 2019 positive earnings surprise of 1.5%. Adjusted earnings were $3.39 per share, surpassing the Zacks Consensus Estimate of $3.34. Also, the bottom line increased 5.3% from the year-ago quarter number of $3.22 backed by solid revenue growth.
In 2019, the company’s adjusted earnings were $13.05 per share, increasing 10% from the year-ago figure of $11.81.
Segmental Revenues
Roper’s net revenues were $1,394.8 million, up 1.3% year over year. Notably, adjusted revenues totaled $1,400 million, up 2% year over year. The rise was primarily driven by 1% organic growth and 1% gain from acquired assets. However, the top line missed the Zacks Consensus Estimate of $1,419 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below:
Application Software’s revenues totaled $410.8 million, representing 29.5% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 4.7%.
Network Software & Systems generated revenues of $425.8 million, accounting for roughly 30.5% of fourth-quarter revenues. Sales grew 19.8% year over year.
Measurement & Analytical Solutions generated revenues of $387.9 million, accounting for roughly 27.8% of the quarter’s top line. Sales declined 13.1% year over year.
Process Technologies generated revenues of $170.3 million, accounting for roughly 12.1% of the quarter’s revenues. Sales edged down 6.5% year over year.
Margin Details
In the October-December quarter, Roper’s cost of sales decreased 0.3% year over year to $501.9 million. Cost of sales was 35.9% of the quarter’s revenues compared with 36.6% a year ago. Adjusted gross profit increased 3% to $898 million, with margin of 64.1% reflecting expansion of 60 basis points (bps).
Selling, general and administrative expenses fell 2.8% to $494.5 million. It represented 35.3% of total revenues compared with 36.9% in the year-ago quarter. Operating profit improved 0.2% to $440.7 million with margin of 31.6%, down 40 bps year over year.
Balance Sheet & Cash Flow
Exiting the fourth quarter, Roper had cash and cash equivalents of $709.7 million compared with $364.4 million recorded on Dec 31, 2018. Long-term debt declined 5.4% to $4,673.1 million from the end of 2018.
In 2019, the company generated net cash of $1,461.8 million from operating activities, up 2.2% year over year.
Capital expenditure during the fourth quarter totaled $10 million, lower than the year-ago figure of $15 million. Adjusted free cash flow in the quarter was up 1% to $453 million.
Outlook
For 2020, adjusted earnings per share are anticipated to be $13.30-$13.60, with organic revenue growth of 6-7%. For the first quarter of 2020, earnings are projected to be $2.94-$3.00 per share.
How Have Estimates Been Moving Since Then?
Estimates revision followed a downward path over the past two months. The consensus estimate has shifted -7.53% due to these changes.
VGM Scores
At this time, Roper Technologies has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Roper Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.