42.89 USD
+0.46 (+1.08%)
44.0815 USD
+1.19 (+2.78%)
We assign a fundamental rating of 5 out of 10 to PRGS. PRGS was compared to 278 industry peers in the Software industry. While PRGS has a great profitability rating, there are quite some concerns on its financial health. PRGS may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
- PRGS had positive earnings in the past year.
- In the past year PRGS had a positive cash flow from operations.
- In the past 5 years PRGS has always been profitable.
- PRGS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- PRGS's Return On Assets of 2.98% is fine compared to the rest of the industry. PRGS outperforms 65.47% of its industry peers.
- PRGS has a Return On Equity of 15.29%. This is amongst the best in the industry. PRGS outperforms 82.37% of its industry peers.
- PRGS's Return On Invested Capital of 8.59% is amongst the best of the industry. PRGS outperforms 80.94% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for PRGS is below the industry average of 10.76%.
- The 3 year average ROIC (7.72%) for PRGS is below the current ROIC(8.59%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.98% | ||
| ROE | 15.29% | ||
| ROIC | 8.59% |
ROA(3y)3.35%
ROA(5y)4.51%
ROE(3y)15.39%
ROE(5y)17.81%
ROIC(3y)7.72%
ROIC(5y)8.49%
1.3 Margins
- With a decent Profit Margin value of 7.48%, PRGS is doing good in the industry, outperforming 67.63% of the companies in the same industry.
- In the last couple of years the Profit Margin of PRGS has declined.
- Looking at the Operating Margin, with a value of 17.84%, PRGS belongs to the top of the industry, outperforming 84.89% of the companies in the same industry.
- In the last couple of years the Operating Margin of PRGS has declined.
- PRGS has a Gross Margin of 80.82%. This is amongst the best in the industry. PRGS outperforms 83.45% of its industry peers.
- 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 | 17.84% | ||
| PM (TTM) | 7.48% | ||
| GM | 80.82% |
OM growth 3Y-5.53%
OM growth 5Y-7.61%
PM growth 3Y-22.06%
PM growth 5Y-16.13%
GM growth 3Y-1.4%
GM growth 5Y-1.22%
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 less shares outstanding
- The number of shares outstanding for PRGS has been reduced compared to 5 years ago.
- PRGS has a better debt/assets ratio than last year.
2.2 Solvency
- PRGS has an Altman-Z score of 1.06. This is a bad value and indicates that PRGS is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.06, PRGS is doing worse than 62.23% of the companies in the same industry.
- The Debt to FCF ratio of PRGS is 6.10, which is on the high side as it means it would take PRGS, 6.10 years of fcf income to pay off all of its debts.
- PRGS has a Debt to FCF ratio (6.10) which is in line with its industry peers.
- PRGS has a Debt/Equity ratio of 2.18. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 2.18, PRGS is doing worse than 82.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.18 | ||
| Debt/FCF | 6.1 | ||
| Altman-Z | 1.06 |
ROIC/WACC0.84
WACC10.21%
2.3 Liquidity
- A Current Ratio of 0.49 indicates that PRGS may have some problems paying its short term obligations.
- With a Current ratio value of 0.49, PRGS is not doing good in the industry: 93.88% of the companies in the same industry are doing better.
- PRGS has a Quick Ratio of 0.49. 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's Quick ratio of 0.49 is on the low side compared to the rest of the industry. PRGS is outperformed by 93.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.49 | ||
| Quick Ratio | 0.49 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 16.02% over the past year.
- The Earnings Per Share has been growing by 13.18% on average over the past years. This is quite good.
- PRGS shows a strong growth in Revenue. In the last year, the Revenue has grown by 29.79%.
- PRGS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.20% yearly.
EPS 1Y (TTM)16.02%
EPS 3Y11.47%
EPS 5Y13.18%
EPS Q2Q%13.53%
Revenue 1Y (TTM)29.79%
Revenue growth 3Y17.55%
Revenue growth 5Y17.2%
Sales Q2Q%17.54%
3.2 Future
- The Earnings Per Share is expected to grow by 1.00% on average over the next years.
- Based on estimates for the next years, PRGS will show a small growth in Revenue. The Revenue will grow by 0.99% on average per year.
EPS Next Y1.01%
EPS Next 2Y1%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year1.34%
Revenue Next 2Y1.36%
Revenue Next 3Y1.65%
Revenue Next 5Y0.99%
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 7.50, the valuation of PRGS can be described as very cheap.
- PRGS's Price/Earnings ratio is rather cheap when compared to the industry. PRGS is cheaper than 91.37% of the companies in the same industry.
- When comparing the Price/Earnings ratio of PRGS to the average of the S&P500 Index (27.25), we can say PRGS is valued rather cheaply.
- A Price/Forward Earnings ratio of 7.42 indicates a rather cheap valuation of PRGS.
- Based on the Price/Forward Earnings ratio, PRGS is valued cheaper than 92.09% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of PRGS to the average of the S&P500 Index (25.98), we can say PRGS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.5 | ||
| Fwd PE | 7.42 |
4.2 Price Multiples
- 89.21% of the companies in the same industry are more expensive than PRGS, based on the Enterprise Value to EBITDA ratio.
- 94.96% of the companies in the same industry are more expensive than PRGS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.02 | ||
| EV/EBITDA | 9.58 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of PRGS may justify a higher PE ratio.
PEG (NY)7.4
PEG (5Y)0.57
EPS Next 2Y1%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- PRGS has a Yearly Dividend Yield of 1.31%.
- Compared to an average industry Dividend Yield of 0.54, PRGS pays a better dividend. On top of this PRGS pays more dividend than 93.53% of the companies listed in the same industry.
- Compared to the average S&P500 Dividend Yield of 1.82, PRGS is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
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.
Dividend Growth(5Y)3.19%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 1.07% of the earnings are spent on dividend by PRGS. This is a low number and sustainable payout ratio.
- The dividend of PRGS is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP1.07%
EPS Next 2Y1%
EPS Next 3YN/A
PROGRESS SOFTWARE CORP / PRGS FAQ
What is the ChartMill fundamental rating of PROGRESS SOFTWARE CORP (PRGS) stock?
ChartMill assigns a fundamental rating of 5 / 10 to PRGS.
What is the valuation status of PROGRESS SOFTWARE CORP (PRGS) stock?
ChartMill assigns a valuation rating of 8 / 10 to PROGRESS SOFTWARE CORP (PRGS). This can be considered as Undervalued.
Can you provide the profitability details for PROGRESS SOFTWARE CORP?
PROGRESS SOFTWARE CORP (PRGS) has a profitability rating of 7 / 10.
How financially healthy is PROGRESS SOFTWARE CORP?
The financial health rating of PROGRESS SOFTWARE CORP (PRGS) is 2 / 10.
Can you provide the expected EPS growth for PRGS stock?
The Earnings per Share (EPS) of PROGRESS SOFTWARE CORP (PRGS) is expected to grow by 1.01% in the next year.