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Why Is Roper Technologies (ROP) Up 11.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Roper Technologies (ROP - Free Report) . Shares have added about 11.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Roper Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Roper Earnings Surpass Estimates in Q1, Decline Y/Y
Roper delivered a positive earnings surprise of 7% in first-quarter 2020. Adjusted earnings were $3.05 per share, surpassing the Zacks Consensus Estimate of $2.85. However, the bottom line decreased 7.6% from the year-ago quarter number of $3.30 per share.
Inside the Headlines
Roper’s net revenues were $1,350.7 million, up 5% year over year. Notably, adjusted revenues totaled $1,353 million, up 5% year over year. The rise was primarily driven by 4% organic growth and 2% gain from acquired assets. Also, the top line beat the Zacks Consensus Estimate of $1,286 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below.
Application Software’s revenues totaled $405.1 million, representing 30% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 6.3%.
Network Software & Systems generated revenues of $438.2 million, accounting for 32.4% of first-quarter revenues. Sales grew 26.6% year over year.
Measurement & Analytical Solutions generated revenues of $365.2 million, accounting for roughly 27% of the quarter’s revenues. Sales declined 9.1% year over year.
Process Technologies generated revenues of $142.2 million, accounting for 10.6% of the quarter’s revenues. Sales were down 10.3% year over year.
Margin Details
In the first quarter, Roper’s cost of sales increased 3.6% year over year to $493.9 million. Cost of sales was 36.6% of the quarter’s revenues compared with 37% a year ago. Adjusted gross profit increased 6% to $859 million, with margin of 63.5% reflecting an expansion of 50 basis points (bps).
Selling, general and administrative expenses increased 9.3% to $507.6 million. It represented 37.6% of total revenues compared with 36.1% in the year-ago quarter. Operating profit improved 2.3% to $393.6 million, with margin of 29.1%, down 80 bps year over year.
Balance Sheet & Cash Flow
Exiting the first quarter, Roper had cash and cash equivalents of $999.8 million compared with $709.7 million recorded on Dec 31, 2019. Long-term debt was $4,674.2 million compared with $4,673.1 million at the end of 2019.
In the first three months of 2020, the company generated net cash of $363.9 million from operating activities, up 25.4% year over year.
Capital expenditure during the first quarter totaled $7.9 million, lower than the year-ago figure of $15.8 million. Adjusted free cash flow in the quarter was up 13% to $353 million on a year-over-year basis.
Outlook
For 2020, adjusted earnings per share are anticipated to be $11.60-$12.60.
For the second quarter of 2020, earnings are projected to be $2.50-$2.70 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -9.34% due to these changes.
VGM Scores
At this time, Roper Technologies has a nice Growth Score of B, a grade with the same score on the momentum front. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, 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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Why Is Roper Technologies (ROP) Up 11.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Roper Technologies (ROP - Free Report) . Shares have added about 11.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Roper Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Roper Earnings Surpass Estimates in Q1, Decline Y/Y
Roper delivered a positive earnings surprise of 7% in first-quarter 2020. Adjusted earnings were $3.05 per share, surpassing the Zacks Consensus Estimate of $2.85. However, the bottom line decreased 7.6% from the year-ago quarter number of $3.30 per share.
Inside the Headlines
Roper’s net revenues were $1,350.7 million, up 5% year over year. Notably, adjusted revenues totaled $1,353 million, up 5% year over year. The rise was primarily driven by 4% organic growth and 2% gain from acquired assets. Also, the top line beat the Zacks Consensus Estimate of $1,286 million.
The company reports revenues under four segments. A brief discussion of the quarterly results is provided below.
Application Software’s revenues totaled $405.1 million, representing 30% of the quarter’s revenues. On a year-over-year basis, the segment’s revenues grew 6.3%.
Network Software & Systems generated revenues of $438.2 million, accounting for 32.4% of first-quarter revenues. Sales grew 26.6% year over year.
Measurement & Analytical Solutions generated revenues of $365.2 million, accounting for roughly 27% of the quarter’s revenues. Sales declined 9.1% year over year.
Process Technologies generated revenues of $142.2 million, accounting for 10.6% of the quarter’s revenues. Sales were down 10.3% year over year.
Margin Details
In the first quarter, Roper’s cost of sales increased 3.6% year over year to $493.9 million. Cost of sales was 36.6% of the quarter’s revenues compared with 37% a year ago. Adjusted gross profit increased 6% to $859 million, with margin of 63.5% reflecting an expansion of 50 basis points (bps).
Selling, general and administrative expenses increased 9.3% to $507.6 million. It represented 37.6% of total revenues compared with 36.1% in the year-ago quarter. Operating profit improved 2.3% to $393.6 million, with margin of 29.1%, down 80 bps year over year.
Balance Sheet & Cash Flow
Exiting the first quarter, Roper had cash and cash equivalents of $999.8 million compared with $709.7 million recorded on Dec 31, 2019. Long-term debt was $4,674.2 million compared with $4,673.1 million at the end of 2019.
In the first three months of 2020, the company generated net cash of $363.9 million from operating activities, up 25.4% year over year.
Capital expenditure during the first quarter totaled $7.9 million, lower than the year-ago figure of $15.8 million. Adjusted free cash flow in the quarter was up 13% to $353 million on a year-over-year basis.
Outlook
For 2020, adjusted earnings per share are anticipated to be $11.60-$12.60.
For the second quarter of 2020, earnings are projected to be $2.50-$2.70 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -9.34% due to these changes.
VGM Scores
At this time, Roper Technologies has a nice Growth Score of B, a grade with the same score on the momentum front. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Roper Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.