PROGRESS SOFTWARE CORP (PRGS)

US7433121008 - Common Stock

52.77  +0.14 (+0.27%)

Fundamental Rating

6

Overall PRGS gets a fundamental rating of 6 out of 10. We evaluated PRGS against 279 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



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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.
Each year in the past 5 years PRGS has been profitable.
In the past 5 years PRGS always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of PRGS (4.38%) is better than 80.22% of its industry peers.
PRGS has a Return On Equity of 15.28%. This is amongst the best in the industry. PRGS outperforms 88.85% of its industry peers.
PRGS's Return On Invested Capital of 8.78% is amongst the best of the industry. PRGS outperforms 88.13% of its industry peers.
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 10.09%.
Industry RankSector Rank
ROA 4.38%
ROE 15.28%
ROIC 8.78%
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

PRGS has a better Profit Margin (10.11%) than 83.09% of its industry peers.
PRGS's Profit Margin has declined in the last couple of years.
PRGS has a better Operating Margin (18.69%) than 89.21% of its industry peers.
In the last couple of years the Operating Margin of PRGS has remained more or less at the same level.
With an excellent Gross Margin value of 81.78%, PRGS belongs to the best of the industry, outperforming 87.77% of the companies in the same industry.
In the last couple of years the Gross Margin of PRGS has remained more or less at the same level.
Industry RankSector Rank
OM 18.69%
PM (TTM) 10.11%
GM 81.78%
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%

3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PRGS is creating some value.
Compared to 1 year ago, PRGS has more shares outstanding
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

An Altman-Z score of 2.00 indicates that PRGS is not a great score, but indicates only limited risk for bankruptcy at the moment.
PRGS has a Altman-Z score (2.00) which is in line with its industry peers.
The Debt to FCF ratio of PRGS is 4.30, which is a neutral value as it means it would take PRGS, 4.30 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 4.30, PRGS is doing good in the industry, outperforming 64.39% of the companies in the same industry.
A Debt/Equity ratio of 1.55 is on the high side and indicates that PRGS has dependencies on debt financing.
PRGS has a worse Debt to Equity ratio (1.55) than 80.58% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.55
Debt/FCF 4.3
Altman-Z 2
ROIC/WACC0.98
WACC8.92%

2.3 Liquidity

PRGS has a Current Ratio of 0.94. 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 0.94 is on the low side compared to the rest of the industry. PRGS is outperformed by 79.50% of its industry peers.
PRGS has a Quick Ratio of 0.94. This is a bad value and indicates that PRGS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of PRGS (0.94) is worse than 78.78% of its industry peers.
Industry RankSector Rank
Current Ratio 0.94
Quick Ratio 0.94

4

3. Growth

3.1 Past

PRGS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.33%.
Measured over the past years, PRGS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.71% on average per year.
The Revenue has grown by 15.38% 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 12.88% on average per year.
EPS 1Y (TTM)5.33%
EPS 3Y12.2%
EPS 5Y11.71%
EPS growth Q2Q-8.93%
Revenue 1Y (TTM)15.38%
Revenue growth 3Y16.24%
Revenue growth 5Y12.88%
Revenue growth Q2Q12.65%

3.2 Future

The Earnings Per Share is expected to grow by 7.25% on average over the next years.
PRGS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.00% yearly.
EPS Next Y8.68%
EPS Next 2Y8.52%
EPS Next 3Y7.25%
EPS Next 5YN/A
Revenue Next Year4.84%
Revenue Next 2Y4.94%
Revenue Next 3Y4%
Revenue Next 5YN/A

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.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 12.13, the valuation of PRGS can be described as correct.
93.88% of the companies in the same industry are more expensive than PRGS, based on the Price/Earnings ratio.
PRGS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.42.
A Price/Forward Earnings ratio of 11.16 indicates a reasonable valuation of PRGS.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 93.53% of the companies listed in the same industry.
PRGS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.74.
Industry RankSector Rank
PE 12.13
Fwd PE 11.16

4.2 Price Multiples

PRGS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PRGS is cheaper than 92.45% of the companies in the same industry.
93.17% of the companies in the same industry are more expensive than PRGS, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 13.75
EV/EBITDA 12.48

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of PRGS may justify a higher PE ratio.
PEG (NY)1.4
PEG (5Y)1.04
EPS Next 2Y8.52%
EPS Next 3Y7.25%

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5. Dividend

5.1 Amount

PRGS has a Yearly Dividend Yield of 1.33%.
PRGS's Dividend Yield is rather good when compared to the industry average which is at 11.46. PRGS pays more dividend than 92.81% of the companies in the same industry.
With a Dividend Yield of 1.33, PRGS pays less dividend than the S&P500 average, which is at 2.34.
Industry RankSector Rank
Dividend Yield 1.33%

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

44.93% of the earnings are spent on dividend by PRGS. This is a bit on the high side, but may be sustainable.
PRGS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP44.93%
EPS Next 2Y8.52%
EPS Next 3Y7.25%

PROGRESS SOFTWARE CORP

NASDAQ:PRGS (3/28/2024, 12:28:48 PM)

52.77

+0.14 (+0.27%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.32B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.33%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(8)
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Revenue beat(12)
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Revenue 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 RankSector Rank
PE 12.13
Fwd PE 11.16
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)1.4
PEG (5Y)1.04
Profitability
Industry RankSector Rank
ROA 4.38%
ROE 15.28%
ROCE
ROIC
ROICexc
ROICexgc
OM 18.69%
PM (TTM) 10.11%
GM 81.78%
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 Turnover0.43
Health
Industry RankSector Rank
Debt/Equity 1.55
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.94
Quick Ratio 0.94
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)
Growth
EPS 1Y (TTM)5.33%
EPS 3Y12.2%
EPS 5Y
EPS growth Q2Q
EPS Next Y8.68%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)15.38%
Revenue growth 3Y16.24%
Revenue growth 5Y
Revenue growth 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