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Roper (ROP) Shares Gain 18% in 3 Months: What's Driving It?

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Shares of Roper Technologies, Inc. (ROP - Free Report) have gained notably in the past three months. Growing opportunities in segments, healthy inorganic actions and sound shareholder-friendly policies seem to have boosted sentiments for the stock.

The Sarasota, FL-based company belongs to the Zacks Manufacturing - General Industrial industry, which comes under the ambit of the Zacks Industrial Products sector. The industry is in the top 28% (with a rank of 71) of more than 250 Zacks industries. Roper has a $48.3-billion market capitalization and it currently carries a Zacks Rank #3 (Hold).

In the past three months, the company’s shares have gained 17.5% compared with the industry’s growth of 4.9%. Notably, the S&P 500 has risen 7.3% and the sector has declined 0.8% during the same period.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Factors Influencing the Stock

In the past three months, Roper delivered first-quarter 2021 results. Its earnings surpassed the Zacks Consensus Estimate by 8.4%, whereas, sales exceeded the same by 1.3%. On a year-over-year basis, the company’s earnings increased 18% on the back of revenue growth and margin improvement.

Impressive performance and solid growth opportunities seem to have favored the hike in the stock price. The company’s segmental performance might benefit from solid product offerings, focus on innovation and strengthening demand in markets served in the quarters ahead. Also, effective marketing strategy and operational execution might be tailwinds.

For 2021, the company anticipates adjusted earnings of $14.75-$15.00 per share, up from the previously mentioned $14.35-$14.75. Earnings for the second quarter of 2021 are expected to be $3.61-$3.65 per share. Revenues for the year are anticipated to increase in double digits, with organic sales expanding in high-single digits.

In addition, Roper’s buyout actions have been proving beneficial. Acquisitions had a year-over-year positive impact of 12% on first-quarter 2021 sales. Notably, the company expects WELIS and Impact Financial Systems, both acquired in September 2020, and EPSi (added to the portfolio last October) to boost sales by $75 million. Further, the company’s policy of rewarding shareholders through dividends adds to its attractiveness.

Currently, the Zacks Consensus Estimate for the company’s earnings is pegged at $14.99 for 2021 and $16.01 for 2022, marking increases of 2.7% and 3.5% from the respective 60-day-ago figures. Also, the consensus estimate for the second quarter improved from $3.59 to $3.66. Such an upward revision in earnings estimates is reflective of healthy operating conditions for the company.

IDEX Corporation Price and Consensus

 

IDEX Corporation Price and Consensus

IDEX Corporation price-consensus-chart | IDEX Corporation Quote

Stocks to Consider

Some better-ranked stocks in the industry are Tennant Company (TNC - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Dover Corporation (DOV - Free Report) . While Tennant currently sports a Zacks Rank #1 (Strong Buy), both Applied Industrial and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for the companies have improved for the current year. Further, earnings surprise for the last reported quarter was 82.81% for Tennant, 35.64% for Applies Industrial and 23.13% for Dover.

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