PROGRESS SOFTWARE CORP (PRGS) Stock Fundamental Analysis
NASDAQ:PRGS - Nasdaq - US7433121008 - Common Stock - Currency: USD
Overall PRGS gets a fundamental rating of 5 out of 10. We evaluated PRGS against 283 industry peers in the Software industry. While PRGS belongs to the best of the industry regarding profitability, there are 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
In the past year PRGS was profitable.
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
PRGS's Return On Assets of 2.30% is fine compared to the rest of the industry. PRGS outperforms 69.96% of its industry peers.
With an excellent Return On Equity value of 13.14%, PRGS belongs to the best of the industry, outperforming 80.92% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 6.36%, PRGS is in the better half of the industry, outperforming 78.09% of the companies in the same industry.
PRGS had an Average Return On Invested Capital over the past 3 years of 7.93%. This is below the industry average of 12.35%.
| 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
PRGS's Profit Margin of 7.03% is fine compared to the rest of the industry. PRGS outperforms 73.50% of its industry peers.
In the last couple of years the Profit Margin of PRGS has grown nicely.
PRGS has a Operating Margin of 19.94%. This is amongst the best in the industry. PRGS outperforms 87.28% of its industry peers.
In the last couple of years the Operating Margin of PRGS has grown nicely.
PRGS has a Gross Margin of 82.16%. This is amongst the best in the industry. PRGS outperforms 88.69% 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 | 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
PRGS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
PRGS has an Altman-Z score of 1.37. This is a bad value and indicates that PRGS is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of PRGS (1.37) is comparable to the rest of the 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.
With a Debt to FCF ratio value of 7.35, PRGS perfoms like the industry average, outperforming 53.36% of the companies in the same industry.
PRGS has a Debt/Equity ratio of 3.47. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of PRGS (3.47) is worse than 81.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.47 | ||
| Debt/FCF | 7.35 | ||
| Altman-Z | 1.37 |
ROIC/WACC0.63
WACC10.07%
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's Current ratio of 0.79 is on the low side compared to the rest of the industry. PRGS is outperformed by 83.04% of its industry peers.
A Quick Ratio of 0.79 indicates that PRGS may have some problems paying its short term obligations.
The Quick ratio of PRGS (0.79) is worse than 83.04% 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.
The Revenue has grown by 12.84% in the past year. This is quite good.
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
The Earnings Per Share is expected to grow by 8.25% 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 7.74% on average per year.
EPS Next Y9.58%
EPS Next 2Y9.07%
EPS Next 3Y8.25%
EPS Next 5YN/A
Revenue Next Year28.7%
Revenue Next 2Y14.82%
Revenue Next 3Y10.05%
Revenue Next 5Y7.74%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
A Price/Earnings ratio of 12.86 indicates a correct valuation of PRGS.
PRGS's Price/Earnings ratio is rather cheap when compared to the industry. PRGS is cheaper than 90.11% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.52, PRGS is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.94, the valuation of PRGS can be described as reasonable.
Based on the Price/Forward Earnings ratio, PRGS is valued cheaply inside the industry as 89.75% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of PRGS to the average of the S&P500 Index (22.25), we can say PRGS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.86 | ||
| Fwd PE | 10.94 |
4.2 Price Multiples
85.87% of the companies in the same industry are more expensive than PRGS, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, PRGS is valued cheaper than 92.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.55 | ||
| EV/EBITDA | 14.94 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PRGS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.34
PEG (5Y)1
EPS Next 2Y9.07%
EPS Next 3Y8.25%
5. Dividend
5.1 Amount
PRGS has a Yearly Dividend Yield of 1.15%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 16.24, PRGS pays a better dividend. On top of this PRGS pays more dividend than 93.29% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, PRGS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
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
PRGS pays out 41.67% of its income as dividend. 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 2Y9.07%
EPS Next 3Y8.25%
64.18
+0.59 (+0.93%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners117.32%
Inst Owner Change-1.86%
Ins Owners1.55%
Ins Owner Change4.75%
Market Cap2.76B
Analysts83.08
Price Target74.29 (15.75%)
Short Float %13.36%
Short Ratio8.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
Yearly Dividend0.72
Dividend Growth(5Y)3.19%
DP41.67%
Div Incr Years0
Div Non Decr Years0
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)0%
PT rev (3m)-2.46%
EPS NQ rev (1m)0%
EPS NQ rev (3m)11.32%
EPS NY rev (1m)0%
EPS NY rev (3m)4.71%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.6%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.86 | ||
| Fwd PE | 10.94 | ||
| P/S | 3.42 | ||
| P/FCF | 13.55 | ||
| P/OCF | 13.15 | ||
| P/B | 6.4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.94 |
EPS(TTM)4.99
EY7.78%
EPS(NY)5.87
Fwd EY9.14%
FCF(TTM)4.74
FCFY7.38%
OCF(TTM)4.88
OCFY7.6%
SpS18.75
BVpS10.04
TBVpS-35.98
PEG (NY)1.34
PEG (5Y)1
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 | 1.37 |
F-Score5
WACC10.07%
ROIC/WACC0.63
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 2Y9.07%
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 2Y14.82%
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%