As of July 21, 2023, Roper Technologies Inc (ROP, Financial) experienced a gain of 3.69%, with its stock price reaching $499.38. This places the company's market cap at $53.2 billion. According to GuruFocus.com's unique valuation method, the GF Value, Roper Technologies (ROP) appears to be fairly valued with a GF Value of $503.32. The company reported earnings per share of $26.29 and sales of $5.6 billion.
Roper Technologies is a diversified technology company with operations in application software, network software and systems, and technology-enabled products. The company's business model emphasizes the acquisition of asset-light, cash-generative businesses, which are then managed in a decentralized manner. Over time, Roper Technologies has successfully transitioned a majority of its business from legacy industrial products into technology software in mature, niche markets.
GF Value of Roper Technologies (ROP, Financial)
The GF Value of a stock is a unique indicator of its intrinsic worth, calculated based on historical trading multiples, an internal adjustment factor from GuruFocus, and estimates of future business performance. In the case of Roper Technologies, the stock appears to be fairly valued. This suggests that the long-term return of its stock is likely to be close to the rate of its business growth.
Invest in companies that may deliver higher future returns at reduced risk.
Financial Strength and Profitability of Roper Technologies
Before investing in a company's stock, it's crucial to evaluate its financial strength. Companies with poor financial strength pose a higher risk of permanent loss. Roper Technologies has a cash-to-debt ratio of 0.18, which is lower than 88.98% of companies in the software industry. This indicates that the company's financial strength is fair.
Profitable companies, especially those with consistent profitability, are generally less risky investments. Roper Technologies has been profitable for the past 10 years. With an operating margin of 28.22%, the company ranks better than 94.6% of companies in the software industry, indicating strong profitability.
Growth and ROIC vs WACC
Growth is an important factor in a company's valuation. Roper Technologies has a 3-year average annual revenue growth rate of 3.8%, which is lower than 60.46% of companies in the software industry. Its 3-year average EBITDA growth rate is -7.6%, ranking lower than 74.13% of companies in the software industry.
Comparing a company's return on invested capital (ROIC) with its weighted cost of capital (WACC) is another way to assess its profitability. Roper Technologies' ROIC is 4.91, and its WACC is 9.45.
Conclusion
In conclusion, Roper Technologies' stock appears to be fairly valued. The company's financial condition is fair, and its profitability is strong. However, its growth ranks lower than 74.13% of companies in the software industry. For more information about Roper Technologies' stock, check out its 30-Year Financials here.
Find high-quality companies that may deliver above-average returns with the GuruFocus High Quality Low Capex Screener.
