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PROGRESS SOFTWARE CORP (PRGS) Stock Fundamental Analysis

NASDAQ:PRGS - Nasdaq - US7433121008 - Common Stock

57.49  -6.03 (-9.49%)

Fundamental Rating

5

PRGS gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 285 industry peers in the Software industry. While PRGS is still in line with the averages on profitability rating, there are concerns on its financial health. PRGS is valued quite cheap, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

PRGS had positive earnings in the past year.
PRGS had a positive operating cash flow in the past year.
Of the past 5 years PRGS 4 years were profitable.
Of the past 5 years PRGS 4 years had a positive operating cash flow.
PRGS Yearly Net Income VS EBIT VS OCF VS FCFPRGS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50M -50M 100M 150M

1.2 Ratios

PRGS has a Return On Assets of 5.10%. This is in the better half of the industry: PRGS outperforms 76.70% of its industry peers.
PRGS has a Return On Equity of 19.41%. This is amongst the best in the industry. PRGS outperforms 86.74% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.07%, PRGS belongs to the top of the industry, outperforming 84.95% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PRGS is below the industry average of 12.12%.
Industry RankSector Rank
ROA 5.1%
ROE 19.41%
ROIC 9.07%
ROA(3y)5.62%
ROA(5y)5.5%
ROE(3y)19.38%
ROE(5y)17.83%
ROIC(3y)9.64%
ROIC(5y)10.24%
PRGS Yearly ROA, ROE, ROICPRGS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20

1.3 Margins

With a decent Profit Margin value of 11.55%, PRGS is doing good in the industry, outperforming 78.85% of the companies in the same industry.
PRGS's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.55%, PRGS belongs to the top of the industry, outperforming 87.10% of the companies in the same industry.
PRGS's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 82.16%, PRGS belongs to the best of the industry, outperforming 87.10% of the companies in the same industry.
PRGS's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 19.55%
PM (TTM) 11.55%
GM 82.16%
OM growth 3Y-10.99%
OM growth 5Y-1.27%
PM growth 3Y-17.53%
PM growth 5Y-5.07%
GM growth 3Y-1.64%
GM growth 5Y-0.13%
PRGS Yearly Profit, Operating, Gross MarginsPRGS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40 60 80

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3

2. Health

2.1 Basic Checks

PRGS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
PRGS has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
PRGS Yearly Shares OutstandingPRGS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 10M 20M 30M 40M 50M
PRGS Yearly Total Debt VS Total AssetsPRGS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B

2.2 Solvency

An Altman-Z score of 2.25 indicates that PRGS is not a great score, but indicates only limited risk for bankruptcy at the moment.
PRGS has a Altman-Z score (2.25) which is in line with its industry peers.
The Debt to FCF ratio of PRGS is 3.61, which is a good value as it means it would take PRGS, 3.61 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 3.61, PRGS is doing good in the industry, outperforming 60.93% of the companies in the same industry.
PRGS has a Debt/Equity ratio of 1.87. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.87, PRGS is doing worse than 83.15% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.87
Debt/FCF 3.61
Altman-Z 2.25
ROIC/WACC0.85
WACC10.67%
PRGS Yearly LT Debt VS Equity VS FCFPRGS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M

2.3 Liquidity

A Current Ratio of 1.23 indicates that PRGS should not have too much problems paying its short term obligations.
PRGS's Current ratio of 1.23 is on the low side compared to the rest of the industry. PRGS is outperformed by 63.80% of its industry peers.
PRGS has a Quick Ratio of 1.23. This is a normal value and indicates that PRGS is financially healthy and should not expect problems in meeting its short term obligations.
PRGS's Quick ratio of 1.23 is on the low side compared to the rest of the industry. PRGS is outperformed by 63.44% of its industry peers.
Industry RankSector Rank
Current Ratio 1.23
Quick Ratio 1.23
PRGS Yearly Current Assets VS Current LiabilitesPRGS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M

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3

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 13.33% over the past year.
PRGS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.88% yearly.
EPS 1Y (TTM)13.33%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%30.39%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%21.47%

3.2 Future

Based on estimates for the next years, PRGS will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.12% on average per year.
Based on estimates for the next years, PRGS will show a small growth in Revenue. The Revenue will grow by 1.63% on average per year.
EPS Next Y16.27%
EPS Next 2Y11.12%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year26%
Revenue Next 2Y15.21%
Revenue Next 3Y1.39%
Revenue Next 5Y1.63%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
PRGS Yearly Revenue VS EstimatesPRGS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 200M 400M 600M 800M 1B
PRGS Yearly EPS VS EstimatesPRGS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2 4 6

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8

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 11.66, the valuation of PRGS can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 90.68% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, PRGS is valued rather cheaply.
The Price/Forward Earnings ratio is 10.03, which indicates a very decent valuation of PRGS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 93.19% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 24.44. PRGS is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 11.66
Fwd PE 10.03
PRGS Price Earnings VS Forward Price EarningsPRGS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, PRGS is valued cheaply inside the industry as 88.53% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 93.55% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 11.2
EV/EBITDA 13.54
PRGS Per share dataPRGS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10

4.3 Compensation for Growth

PRGS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of PRGS may justify a higher PE ratio.
PEG (NY)0.72
PEG (5Y)0.91
EPS Next 2Y11.12%
EPS Next 3YN/A

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6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.11%, PRGS has a reasonable but not impressive dividend return.
PRGS's Dividend Yield is rather good when compared to the industry average which is at 11.64. PRGS pays more dividend than 93.19% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.28, PRGS's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 1.11%

5.2 History

The dividend of PRGS has a limited annual growth rate of 5.35%.
PRGS has been paying a dividend for over 5 years, so it has already some track record.
PRGS has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)5.35%
Div Incr Years0
Div Non Decr Years7
PRGS Yearly Dividends per sharePRGS Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6

5.3 Sustainability

PRGS pays out 38.33% of its income as dividend. This is a sustainable payout ratio.
PRGS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.33%
EPS Next 2Y11.12%
EPS Next 3YN/A
PRGS Yearly Income VS Free CF VS DividendPRGS Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50M -50M 100M 150M
PRGS Dividend Payout.PRGS Dividend Payout, showing the Payout Ratio.PRGS Dividend Payout.PayoutRetained Earnings

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PROGRESS SOFTWARE CORP

NASDAQ:PRGS (1/22/2025, 11:55:07 AM)

57.49

-6.03 (-9.49%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)01-21 2025-01-21/amc
Earnings (Next)N/A N/A
Inst Owners112.79%
Inst Owner Change-0.01%
Ins Owners1.42%
Ins Owner Change0.56%
Market Cap2.47B
Analysts83.08
Price Target74.46 (29.52%)
Short Float %12.57%
Short Ratio11.49
Dividend
Industry RankSector Rank
Dividend Yield 1.11%
Yearly Dividend0.72
Dividend Growth(5Y)5.35%
DP38.33%
Div Incr Years0
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.32%
Min EPS beat(2)8.55%
Max EPS beat(2)12.1%
EPS beat(4)4
Avg EPS beat(4)9.58%
Min EPS beat(4)7.53%
Max EPS beat(4)12.1%
EPS beat(8)8
Avg EPS beat(8)8.94%
EPS beat(12)12
Avg EPS beat(12)9.52%
EPS beat(16)16
Avg EPS beat(16)12.8%
Revenue beat(2)1
Avg Revenue beat(2)0.77%
Min Revenue beat(2)-0.38%
Max Revenue beat(2)1.91%
Revenue beat(4)1
Avg Revenue beat(4)0.19%
Min Revenue beat(4)-0.47%
Max Revenue beat(4)1.91%
Revenue beat(8)3
Avg Revenue beat(8)-0.02%
Revenue beat(12)5
Avg Revenue beat(12)0.07%
Revenue beat(16)6
Avg Revenue beat(16)0.08%
PT rev (1m)0%
PT rev (3m)13%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.32%
EPS NY rev (1m)0%
EPS NY rev (3m)1.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.99%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.71%
Valuation
Industry RankSector Rank
PE 11.66
Fwd PE 10.03
P/S 3.45
P/FCF 11.2
P/OCF 10.97
P/B 5.8
P/tB N/A
EV/EBITDA 13.54
EPS(TTM)4.93
EY8.58%
EPS(NY)5.73
Fwd EY9.97%
FCF(TTM)5.13
FCFY8.93%
OCF(TTM)5.24
OCFY9.12%
SpS16.67
BVpS9.92
TBVpS-16.12
PEG (NY)0.72
PEG (5Y)0.91
Profitability
Industry RankSector Rank
ROA 5.1%
ROE 19.41%
ROCE 10.72%
ROIC 9.07%
ROICexc 11.04%
ROICexgc N/A
OM 19.55%
PM (TTM) 11.55%
GM 82.16%
FCFM 30.79%
ROA(3y)5.62%
ROA(5y)5.5%
ROE(3y)19.38%
ROE(5y)17.83%
ROIC(3y)9.64%
ROIC(5y)10.24%
ROICexc(3y)11.59%
ROICexc(5y)12.52%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)11.4%
ROCE(5y)12.1%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-12.78%
ROICexc growth 5Y-13.38%
OM growth 3Y-10.99%
OM growth 5Y-1.27%
PM growth 3Y-17.53%
PM growth 5Y-5.07%
GM growth 3Y-1.64%
GM growth 5Y-0.13%
F-Score7
Asset Turnover0.44
Health
Industry RankSector Rank
Debt/Equity 1.87
Debt/FCF 3.61
Debt/EBITDA 3.27
Cap/Depr 4.56%
Cap/Sales 0.66%
Interest Coverage 9.83
Cash Conversion 92.62%
Profit Quality 266.58%
Current Ratio 1.23
Quick Ratio 1.23
Altman-Z 2.25
F-Score7
WACC10.67%
ROIC/WACC0.85
Cap/Depr(3y)7.48%
Cap/Depr(5y)9.64%
Cap/Sales(3y)0.9%
Cap/Sales(5y)1.03%
Profit Quality(3y)219.07%
Profit Quality(5y)260.46%
High Growth Momentum
Growth
EPS 1Y (TTM)13.33%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%30.39%
EPS Next Y16.27%
EPS Next 2Y11.12%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%21.47%
Revenue Next Year26%
Revenue Next 2Y15.21%
Revenue Next 3Y1.39%
Revenue Next 5Y1.63%
EBIT growth 1Y3.09%
EBIT growth 3Y3.46%
EBIT growth 5Y11.45%
EBIT Next Year48.29%
EBIT Next 3Y26.36%
EBIT Next 5YN/A
FCF growth 1Y15.44%
FCF growth 3Y6.77%
FCF growth 5Y8.09%
OCF growth 1Y14.84%
OCF growth 3Y6.3%
OCF growth 5Y7.45%