PROGRESS SOFTWARE CORP (PRGS) Stock Fundamental Analysis
NASDAQ:PRGS - Nasdaq - US7433121008 - Common Stock - Currency: USD
Overall PRGS gets a fundamental rating of 5 out of 10. We evaluated PRGS against 284 industry peers in the Software industry. PRGS has an excellent profitability rating, but there are concerns on its financial health. PRGS is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year PRGS was profitable.
In the past year PRGS had a positive cash flow from operations.
In the past 5 years PRGS has always been profitable.
Each year in the past 5 years PRGS had a positive operating cash flow.
1.2 Ratios
PRGS has a better Return On Assets (2.71%) than 69.57% of its industry peers.
The Return On Equity of PRGS (15.60%) is better than 83.70% of its industry peers.
The Return On Invested Capital of PRGS (6.10%) is better than 77.90% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PRGS is below the industry average of 11.91%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.71% | ||
| ROE | 15.6% | ||
| ROIC | 6.1% |
ROA(3y)4.61%
ROA(5y)5.45%
ROE(3y)18.24%
ROE(5y)19.35%
ROIC(3y)7.93%
ROIC(5y)9.13%
1.3 Margins
PRGS's Profit Margin of 9.08% is fine compared to the rest of the industry. PRGS outperforms 75.00% of its industry peers.
PRGS's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 20.87%, PRGS belongs to the top of the industry, outperforming 88.04% of the companies in the same industry.
In the last couple of years the Operating Margin of PRGS has grown nicely.
With an excellent Gross Margin value of 82.68%, PRGS belongs to the best of the industry, outperforming 88.41% of the companies in the same industry.
In the last couple of years the Gross Margin of PRGS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.87% | ||
| PM (TTM) | 9.08% | ||
| GM | 82.68% |
OM growth 3Y-4.3%
OM growth 5Y3.62%
PM growth 3Y-14.93%
PM growth 5Y7.3%
GM growth 3Y-1.01%
GM growth 5Y0.21%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PRGS is destroying value.
PRGS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for PRGS has been reduced compared to 5 years ago.
The debt/assets ratio for PRGS is higher compared to a year ago.
2.2 Solvency
PRGS has an Altman-Z score of 1.22. This is a bad value and indicates that PRGS is not financially healthy and even has some risk of bankruptcy.
PRGS has a worse Altman-Z score (1.22) than 62.68% of its industry peers.
The Debt to FCF ratio of PRGS is 7.40, which is on the high side as it means it would take PRGS, 7.40 years of fcf income to pay off all of its debts.
PRGS has a Debt to FCF ratio (7.40) which is in line with its industry peers.
PRGS has a Debt/Equity ratio of 3.48. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 3.48, PRGS is not doing good in the industry: 85.51% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.48 | ||
| Debt/FCF | 7.4 | ||
| Altman-Z | 1.22 |
ROIC/WACC0.54
WACC11.39%
2.3 Liquidity
A Current Ratio of 0.81 indicates that PRGS may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.81, PRGS is doing worse than 82.61% of the companies in the same industry.
A Quick Ratio of 0.81 indicates that PRGS may have some problems paying its short term obligations.
PRGS has a worse Quick ratio (0.81) than 82.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
PRGS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.33%, which is quite good.
PRGS shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.88% yearly.
Looking at the last year, PRGS shows a quite strong growth in Revenue. The Revenue has grown by 8.49% in the last year.
PRGS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.76% yearly.
EPS 1Y (TTM)13.33%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%30.39%
Revenue 1Y (TTM)8.49%
Revenue growth 3Y12.35%
Revenue growth 5Y12.76%
Sales Q2Q%21.47%
3.2 Future
Based on estimates for the next years, PRGS will show a small growth in Earnings Per Share. The EPS will grow by 6.19% on average per year.
PRGS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.54% yearly.
EPS Next Y4.65%
EPS Next 2Y9.92%
EPS Next 3Y6.19%
EPS Next 5YN/A
Revenue Next Year28.64%
Revenue Next 2Y15.27%
Revenue Next 3Y10.15%
Revenue Next 5Y8.54%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
PRGS is valuated reasonably with a Price/Earnings ratio of 11.18.
Based on the Price/Earnings ratio, PRGS is valued cheaply inside the industry as 91.67% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of PRGS to the average of the S&P500 Index (29.63), we can say PRGS is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.68, the valuation of PRGS can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 93.12% of the companies listed in the same industry.
PRGS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.18 | ||
| Fwd PE | 10.68 |
4.2 Price Multiples
PRGS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PRGS is cheaper than 87.68% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PRGS is valued cheaply inside the industry as 93.48% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.58 | ||
| EV/EBITDA | 14.59 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PRGS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.4
PEG (5Y)0.87
EPS Next 2Y9.92%
EPS Next 3Y6.19%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.24%, PRGS has a reasonable but not impressive dividend return.
In the last 3 months the price of PRGS has falen by -20.43%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
PRGS's Dividend Yield is rather good when compared to the industry average which is at 12.83. PRGS pays more dividend than 93.84% of the companies in the same industry.
With a Dividend Yield of 1.24, PRGS pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
5.2 History
The dividend of PRGS has a limited annual growth rate of 3.19%.
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)3.19%
Div Incr Years0
Div Non Decr Years7
5.3 Sustainability
PRGS pays out 45.97% of its income as dividend. This is a bit on the high side, but may be sustainable.
PRGS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP45.97%
EPS Next 2Y9.92%
EPS Next 3Y6.19%
55.1
-1.46 (-2.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners117.32%
Inst Owner Change-88.47%
Ins Owners1.55%
Ins Owner Change3.49%
Market Cap2.39B
Analysts83.08
Price Target76.16 (38.22%)
Short Float %13.16%
Short Ratio8.13
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Yearly Dividend0.72
Dividend Growth(5Y)3.19%
DP45.97%
Div Incr Years0
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.92%
Min EPS beat(2)7.29%
Max EPS beat(2)8.55%
EPS beat(4)4
Avg EPS beat(4)8.87%
Min EPS beat(4)7.29%
Max EPS beat(4)12.1%
EPS beat(8)8
Avg EPS beat(8)9.72%
EPS beat(12)12
Avg EPS beat(12)8.26%
EPS beat(16)16
Avg EPS beat(16)12.31%
Revenue beat(2)0
Avg Revenue beat(2)-0.31%
Min Revenue beat(2)-0.38%
Max Revenue beat(2)-0.24%
Revenue beat(4)1
Avg Revenue beat(4)0.21%
Min Revenue beat(4)-0.47%
Max Revenue beat(4)1.91%
Revenue beat(8)3
Avg Revenue beat(8)0.6%
Revenue beat(12)4
Avg Revenue beat(12)-0.02%
Revenue beat(16)6
Avg Revenue beat(16)0.46%
PT rev (1m)2.28%
PT rev (3m)4.28%
EPS NQ rev (1m)-24.13%
EPS NQ rev (3m)-16.01%
EPS NY rev (1m)-9.99%
EPS NY rev (3m)-9.99%
Revenue NQ rev (1m)3.55%
Revenue NQ rev (3m)23.85%
Revenue NY rev (1m)2.09%
Revenue NY rev (3m)4.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.18 | ||
| Fwd PE | 10.68 | ||
| P/S | 3.17 | ||
| P/FCF | 11.58 | ||
| P/OCF | 11.3 | ||
| P/B | 5.45 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.59 |
EPS(TTM)4.93
EY8.95%
EPS(NY)5.16
Fwd EY9.36%
FCF(TTM)4.76
FCFY8.63%
OCF(TTM)4.88
OCFY8.85%
SpS17.37
BVpS10.12
TBVpS-36.36
PEG (NY)2.4
PEG (5Y)0.87
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.71% | ||
| ROE | 15.6% | ||
| ROCE | 7.59% | ||
| ROIC | 6.1% | ||
| ROICexc | 6.47% | ||
| ROICexgc | N/A | ||
| OM | 20.87% | ||
| PM (TTM) | 9.08% | ||
| GM | 82.68% | ||
| FCFM | 27.38% |
ROA(3y)4.61%
ROA(5y)5.45%
ROE(3y)18.24%
ROE(5y)19.35%
ROIC(3y)7.93%
ROIC(5y)9.13%
ROICexc(3y)9.33%
ROICexc(5y)10.7%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)9.87%
ROCE(5y)11.36%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-17.49%
ROICexc growth 5Y-12.26%
OM growth 3Y-4.3%
OM growth 5Y3.62%
PM growth 3Y-14.93%
PM growth 5Y7.3%
GM growth 3Y-1.01%
GM growth 5Y0.21%
F-Score5
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.48 | ||
| Debt/FCF | 7.4 | ||
| Debt/EBITDA | 5.86 | ||
| Cap/Depr | 5.05% | ||
| Cap/Sales | 0.69% | ||
| Interest Coverage | 7.22 | ||
| Cash Conversion | 81.27% | ||
| Profit Quality | 301.42% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 1.22 |
F-Score5
WACC11.39%
ROIC/WACC0.54
Cap/Depr(3y)6.21%
Cap/Depr(5y)9.24%
Cap/Sales(3y)0.84%
Cap/Sales(5y)0.97%
Profit Quality(3y)245.65%
Profit Quality(5y)226.43%
High Growth Momentum
Growth
EPS 1Y (TTM)13.33%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%30.39%
EPS Next Y4.65%
EPS Next 2Y9.92%
EPS Next 3Y6.19%
EPS Next 5YN/A
Revenue 1Y (TTM)8.49%
Revenue growth 3Y12.35%
Revenue growth 5Y12.76%
Sales Q2Q%21.47%
Revenue Next Year28.64%
Revenue Next 2Y15.27%
Revenue Next 3Y10.15%
Revenue Next 5Y8.54%
EBIT growth 1Y21.09%
EBIT growth 3Y7.51%
EBIT growth 5Y16.84%
EBIT Next Year72.24%
EBIT Next 3Y21.6%
EBIT Next 5YN/A
FCF growth 1Y22.54%
FCF growth 3Y5.88%
FCF growth 5Y10.63%
OCF growth 1Y21.6%
OCF growth 3Y5.82%
OCF growth 5Y10.48%