PROGRESS SOFTWARE CORP (PRGS) Stock Fundamental Analysis
NASDAQ:PRGS - Nasdaq - US7433121008 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to PRGS. PRGS was compared to 285 industry peers in the Software industry. While PRGS belongs to the best of the industry regarding profitability, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on PRGS.
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.
PRGS had positive earnings in each of the past 5 years.
PRGS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of PRGS (2.30%) is better than 68.42% of its industry peers.
The Return On Equity of PRGS (13.14%) is better than 81.05% of its industry peers.
PRGS has a better Return On Invested Capital (6.36%) than 78.95% of its industry peers.
PRGS had an Average Return On Invested Capital over the past 3 years of 7.93%. This is below the industry average of 11.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.3% | ||
| ROE | 13.14% | ||
| ROIC | 6.36% |
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
With a decent Profit Margin value of 7.03%, PRGS is doing good in the industry, outperforming 72.28% of the companies in the same industry.
PRGS's Profit Margin has improved in the last couple of years.
PRGS has a Operating Margin of 19.94%. This is amongst the best in the industry. PRGS outperforms 87.02% of its industry peers.
In the last couple of years the Operating Margin of PRGS has grown nicely.
With an excellent Gross Margin value of 82.16%, PRGS belongs to the best of the industry, outperforming 87.37% of the companies in the same industry.
PRGS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.94% | ||
| PM (TTM) | 7.03% | ||
| GM | 82.16% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PRGS is destroying value.
The number of shares outstanding for PRGS has been reduced compared to 1 year ago.
Compared to 5 years ago, PRGS has less shares outstanding
The debt/assets ratio for PRGS is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.26, we must say that PRGS is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.26, PRGS perfoms like the industry average, outperforming 45.61% of the companies in the same industry.
PRGS has a debt to FCF ratio of 7.35. This is a slightly negative value and a sign of low solvency as PRGS would need 7.35 years to pay back of all of its debts.
PRGS's Debt to FCF ratio of 7.35 is in line compared to the rest of the industry. PRGS outperforms 52.63% of its industry peers.
A Debt/Equity ratio of 3.47 is on the high side and indicates that PRGS has dependencies on debt financing.
With a Debt to Equity ratio value of 3.47, PRGS is not doing good in the industry: 82.46% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.47 | ||
| Debt/FCF | 7.35 | ||
| Altman-Z | 1.26 |
ROIC/WACC0.65
WACC9.71%
2.3 Liquidity
PRGS has a Current Ratio of 0.79. This is a bad value and indicates that PRGS is not financially healthy enough and could expect problems in meeting its short term obligations.
PRGS has a Current ratio of 0.79. This is amonst the worse of the industry: PRGS underperforms 83.16% of its industry peers.
A Quick Ratio of 0.79 indicates that PRGS may have some problems paying its short term obligations.
PRGS's Quick ratio of 0.79 is on the low side compared to the rest of the industry. PRGS is outperformed by 82.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
PRGS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.15%, which is quite good.
The Earnings Per Share has been growing by 12.88% on average over the past years. This is quite good.
Looking at the last year, PRGS shows a quite strong growth in Revenue. The Revenue has grown by 12.84% in the last year.
Measured over the past years, PRGS shows a quite strong growth in Revenue. The Revenue has been growing by 12.76% on average per year.
EPS 1Y (TTM)13.15%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%4.8%
Revenue 1Y (TTM)12.84%
Revenue growth 3Y12.35%
Revenue growth 5Y12.76%
Sales Q2Q%28.88%
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 8.25% on average per year.
PRGS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.74% yearly.
EPS Next Y9.58%
EPS Next 2Y9.93%
EPS Next 3Y8.25%
EPS Next 5YN/A
Revenue Next Year28.7%
Revenue Next 2Y15.1%
Revenue Next 3Y10.05%
Revenue Next 5Y7.74%
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 decreasing.
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
Based on the Price/Earnings ratio of 11.35, the valuation of PRGS can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 87.37% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.33, PRGS is valued rather cheaply.
PRGS is valuated reasonably with a Price/Forward Earnings ratio of 9.51.
Based on the Price/Forward Earnings ratio, PRGS is valued cheaper than 92.63% of the companies 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 21.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 9.51 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 86.32% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, PRGS is valued cheaply inside the industry as 92.28% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.96 | ||
| EV/EBITDA | 13.57 |
4.3 Compensation for Growth
PRGS's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of PRGS may justify a higher PE ratio.
PEG (NY)1.18
PEG (5Y)0.88
EPS Next 2Y9.93%
EPS Next 3Y8.25%
5. Dividend
5.1 Amount
PRGS has a Yearly Dividend Yield of 1.25%.
PRGS's Dividend Yield is rather good when compared to the industry average which is at 15.07. PRGS pays more dividend than 92.98% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.51, PRGS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
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.
As PRGS did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)3.19%
Div Incr Years0
Div Non Decr Years7
5.3 Sustainability
41.67% of the earnings are spent on dividend by PRGS. This is a bit on the high side, but may be sustainable.
The dividend of PRGS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP41.67%
EPS Next 2Y9.93%
EPS Next 3Y8.25%
56.64
+1.81 (+3.3%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners117.32%
Inst Owner Change0.33%
Ins Owners1.55%
Ins Owner Change3.78%
Market Cap2.44B
Analysts83.08
Price Target74.46 (31.46%)
Short Float %12.54%
Short Ratio7.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.25% |
Yearly Dividend0.72
Dividend Growth(5Y)3.19%
DP41.67%
Div Incr Years0
Div Non Decr Years7
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.41%
Min EPS beat(2)7.29%
Max EPS beat(2)21.52%
EPS beat(4)4
Avg EPS beat(4)12.37%
Min EPS beat(4)7.29%
Max EPS beat(4)21.52%
EPS beat(8)8
Avg EPS beat(8)11%
EPS beat(12)12
Avg EPS beat(12)9.03%
EPS beat(16)16
Avg EPS beat(16)12.15%
Revenue beat(2)0
Avg Revenue beat(2)-0.61%
Min Revenue beat(2)-0.97%
Max Revenue beat(2)-0.24%
Revenue beat(4)1
Avg Revenue beat(4)0.08%
Min Revenue beat(4)-0.97%
Max Revenue beat(4)1.91%
Revenue beat(8)2
Avg Revenue beat(8)0.3%
Revenue beat(12)3
Avg Revenue beat(12)-0.19%
Revenue beat(16)6
Avg Revenue beat(16)0.53%
PT rev (1m)-2.23%
PT rev (3m)0%
EPS NQ rev (1m)11.32%
EPS NQ rev (3m)0.29%
EPS NY rev (1m)4.71%
EPS NY rev (3m)-5.75%
Revenue NQ rev (1m)1.6%
Revenue NQ rev (3m)8.1%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)4.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 9.51 | ||
| P/S | 3.02 | ||
| P/FCF | 11.96 | ||
| P/OCF | 11.61 | ||
| P/B | 5.64 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.57 |
EPS(TTM)4.99
EY8.81%
EPS(NY)5.96
Fwd EY10.52%
FCF(TTM)4.74
FCFY8.36%
OCF(TTM)4.88
OCFY8.61%
SpS18.75
BVpS10.04
TBVpS-35.98
PEG (NY)1.18
PEG (5Y)0.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.3% | ||
| ROE | 13.14% | ||
| ROCE | 7.91% | ||
| ROIC | 6.36% | ||
| ROICexc | 6.77% | ||
| ROICexgc | N/A | ||
| OM | 19.94% | ||
| PM (TTM) | 7.03% | ||
| GM | 82.16% | ||
| FCFM | 25.26% |
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 Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.47 | ||
| Debt/FCF | 7.35 | ||
| Debt/EBITDA | 5.44 | ||
| Cap/Depr | 5.42% | ||
| Cap/Sales | 0.77% | ||
| Interest Coverage | 5.68 | ||
| Cash Conversion | 76.32% | ||
| Profit Quality | 359.06% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 1.26 |
F-Score5
WACC9.71%
ROIC/WACC0.65
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)13.15%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%4.8%
EPS Next Y9.58%
EPS Next 2Y9.93%
EPS Next 3Y8.25%
EPS Next 5YN/A
Revenue 1Y (TTM)12.84%
Revenue growth 3Y12.35%
Revenue growth 5Y12.76%
Sales Q2Q%28.88%
Revenue Next Year28.7%
Revenue Next 2Y15.1%
Revenue Next 3Y10.05%
Revenue Next 5Y7.74%
EBIT growth 1Y26.19%
EBIT growth 3Y7.51%
EBIT growth 5Y16.84%
EBIT Next Year74.16%
EBIT Next 3Y20.7%
EBIT Next 5YN/A
FCF growth 1Y7.69%
FCF growth 3Y5.88%
FCF growth 5Y10.63%
OCF growth 1Y7.72%
OCF growth 3Y5.82%
OCF growth 5Y10.48%