As of July 21, 2023, Roper Technologies Inc (ROP, Financial) has experienced a day's gain of 3.69%, with its stock price standing at $499.38. With a market capitalization of $53.2 billion and sales reaching $5.6 billion, the company's financial metrics are robust. The calculated GF Value of Roper Technologies is $503.32, suggesting that the stock is currently fairly valued.
Roper Technologies operates as a diversified technology company, with business operations spanning across application software, network software and systems, and technology-enabled products. The company's strategic focus is on acquiring asset-light, cash-generative businesses, thereby facilitating an increase in return rates. Over time, Roper Technologies has successfully transitioned a majority of its business from traditional industrial products to technology software in mature, niche markets with substantial deferred revenue.
GF Value: An Insight into Valuation
The GF Value is a unique valuation method that estimates a stock's intrinsic worth based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and future business performance estimates. Roper Technologies (ROP, Financial), with a current stock price of $499.38 and a GF Value of $503.32, appears to be fairly valued. This implies that the long-term return of Roper Technologies' stock is likely to be close to the rate of its business growth.
Financial Strength: A Crucial Aspect
Investing in companies with robust financial strength minimizes the risk of permanent capital loss. Roper Technologies' cash-to-debt ratio stands at 0.18, which is lower than 88.98% of companies in the Software industry. However, with an overall financial strength ranking of 6 out of 10 by GuruFocus, Roper Technologies' financial health appears to be fair.
Profitability: A Sign of Stability
Investing in profitable companies, especially those with consistent profitability over the long term, is generally less risky. Roper Technologies has demonstrated profitability over the past ten years, with an operating margin of 28.22%, ranking better than 94.6% of companies in the Software industry. The company's profitability ranks at 8 out of 10, indicating strong profitability.
Growth: The Key to Valuation
Growth is a critical factor in the valuation of a company. Roper Technologies' 3-year average revenue growth rate is lower than 60.46% of companies in the Software industry, and its 3-year average EBITDA growth rate is -7.6%, ranking lower than 74.13% of companies in the industry.
ROIC vs WACC: A Measure of Profitability
Comparing a company's return on invested capital (ROIC) to its weighted cost of capital (WACC) offers another way to evaluate profitability. Over the past 12 months, Roper Technologies' ROIC was 4.91, while its WACC came in at 9.45.
Conclusion
In conclusion, the stock of Roper Technologies (ROP, Financial) 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, you can check out its 30-Year Financials here.
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