PROGRESS SOFTWARE CORP (PRGS)
US7433121008 - Common Stock
We assign a fundamental rating of 6 out of 10 to PRGS. PRGS was compared to 281 industry peers in the Software industry. PRGS scores excellent on profitability, 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.
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 (5.10%) is better than 76.51% of its industry peers.
PRGS has a Return On Equity of 19.41%. This is amongst the best in the industry. PRGS outperforms 88.97% of its industry peers.
With an excellent Return On Invested Capital value of 9.07%, PRGS belongs to the best of the industry, outperforming 85.41% of the companies in the same industry.
PRGS had an Average Return On Invested Capital over the past 3 years of 9.64%. This is in line with the industry average of 11.23%.
| Industry Rank | Sector 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%
1.3 Margins
The Profit Margin of PRGS (11.55%) is better than 79.36% of its industry peers.
PRGS's Profit Margin has declined in the last couple of years.
PRGS has a Operating Margin of 19.55%. This is amongst the best in the industry. PRGS outperforms 88.61% of its industry peers.
In the last couple of years the Operating Margin of PRGS has remained more or less at the same level.
The Gross Margin of PRGS (82.16%) is better than 87.54% of its industry peers.
PRGS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PRGS is destroying value.
Compared to 1 year ago, PRGS has more shares outstanding
PRGS has less shares outstanding than it did 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 2.26. This is not the best score and indicates that PRGS is in the grey zone with still only limited risk for bankruptcy at the moment.
PRGS has a Altman-Z score of 2.26. This is comparable to the rest of the industry: PRGS outperforms 49.11% of 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.
The Debt to FCF ratio of PRGS (3.61) is better than 62.63% of its industry peers.
PRGS has a Debt/Equity ratio of 1.87. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.87, PRGS is not doing good in the industry: 82.21% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | 3.61 | ||
| Altman-Z | 2.26 |
ROIC/WACC0.93
WACC9.77%
2.3 Liquidity
PRGS has a Current 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.
Looking at the Current ratio, with a value of 1.23, PRGS is doing worse than 62.99% of the companies in the same industry.
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.
With a Quick ratio value of 1.23, PRGS is not doing good in the industry: 62.28% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.23 | ||
| Quick Ratio | 1.23 |
3. Growth
3.1 Past
PRGS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.82%.
The Earnings Per Share has been growing by 11.71% on average over the past years. This is quite good.
The Revenue has been growing slightly by 6.05% in the past year.
Measured over the past years, PRGS shows a quite strong growth in Revenue. The Revenue has been growing by 12.88% on average per year.
EPS 1Y (TTM)3.82%
EPS 3Y12.2%
EPS 5Y11.71%
EPS Q2Q%16.67%
Revenue 1Y (TTM)6.05%
Revenue growth 3Y16.24%
Revenue growth 5Y12.88%
Sales Q2Q%1.65%
3.2 Future
The Earnings Per Share is expected to grow by 11.85% on average over the next years. This is quite good.
Based on estimates for the next years, PRGS will show a small growth in Revenue. The Revenue will grow by 2.78% on average per year.
EPS Next Y12.86%
EPS Next 2Y14.37%
EPS Next 3Y11.85%
EPS Next 5YN/A
Revenue Next Year7.54%
Revenue Next 2Y13.39%
Revenue Next 3Y9.8%
Revenue Next 5Y2.78%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PRGS is valuated correctly with a Price/Earnings ratio of 13.84.
Based on the Price/Earnings ratio, PRGS is valued cheaper than 88.26% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 30.20, PRGS is valued rather cheaply.
PRGS is valuated reasonably with a Price/Forward Earnings ratio of 11.24.
91.81% of the companies in the same industry are more expensive than PRGS, based on the Price/Forward Earnings ratio.
PRGS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.84 | ||
| Fwd PE | 11.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PRGS is valued cheaply inside the industry as 87.19% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, PRGS is valued cheaply inside the industry as 91.46% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.46 | ||
| EV/EBITDA | 13.61 |
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)1.08
PEG (5Y)1.18
EPS Next 2Y14.37%
EPS Next 3Y11.85%
5. Dividend
5.1 Amount
PRGS has a Yearly Dividend Yield of 1.09%. Purely for dividend investing, there may be better candidates out there.
PRGS's Dividend Yield is rather good when compared to the industry average which is at 11.54. PRGS pays more dividend than 93.95% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.26, PRGS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
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
5.3 Sustainability
PRGS pays out 38.33% of its income as dividend. This is a sustainable payout ratio.
The dividend of PRGS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP38.33%
EPS Next 2Y14.37%
EPS Next 3Y11.85%
PROGRESS SOFTWARE CORP
NASDAQ:PRGS (11/4/2024, 8:00:00 PM)
After market: 63.94 0 (0%)63.94
-0.41 (-0.64%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
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Market Cap2.74B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.09% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.84 | ||
| Fwd PE | 11.24 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.08
PEG (5Y)1.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.1% | ||
| ROE | 19.41% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 19.55% | ||
| PM (TTM) | 11.55% | ||
| GM | 82.16% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.87 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.23 | ||
| Quick Ratio | 1.23 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)3.82%
EPS 3Y12.2%
EPS 5Y
EPS Q2Q%
EPS Next Y12.86%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)6.05%
Revenue growth 3Y16.24%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y