PROGRESS SOFTWARE CORP (PRGS) Stock Fundamental Analysis
NASDAQ:PRGS - Nasdaq - US7433121008 - Common Stock - Currency: USD
PRGS gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. While PRGS has a great profitability rating, there are quite some concerns on its financial health. PRGS scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
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
Looking at the Return On Assets, with a value of 2.39%, PRGS is in the better half of the industry, outperforming 70.57% of the companies in the same industry.
PRGS has a Return On Equity of 12.72%. This is amongst the best in the industry. PRGS outperforms 80.14% of its industry peers.
With an excellent Return On Invested Capital value of 8.29%, PRGS belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for PRGS is below the industry average of 12.28%.
The 3 year average ROIC (7.93%) for PRGS is below the current ROIC(8.29%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.39% | ||
| ROE | 12.72% | ||
| ROIC | 8.29% |
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 has a better Profit Margin (6.63%) than 73.76% of its industry peers.
PRGS's Profit Margin has improved in the last couple of years.
PRGS has a Operating Margin of 19.74%. This is amongst the best in the industry. PRGS outperforms 86.88% of its industry peers.
PRGS's Operating Margin has improved in the last couple of years.
The Gross Margin of PRGS (81.69%) is better than 86.52% 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 | 19.74% | ||
| PM (TTM) | 6.63% | ||
| GM | 81.69% |
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
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
Compared to 5 years ago, PRGS has less shares outstanding
Compared to 1 year ago, PRGS has a worse debt to assets ratio.
2.2 Solvency
PRGS has an Altman-Z score of 1.11. This is a bad value and indicates that PRGS is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.11, PRGS is not doing good in the industry: 62.77% of the companies in the same industry are doing better.
PRGS has a debt to FCF ratio of 8.55. This is a slightly negative value and a sign of low solvency as PRGS would need 8.55 years to pay back of all of its debts.
PRGS has a Debt to FCF ratio (8.55) which is comparable to the rest of the industry.
PRGS has a Debt/Equity ratio of 2.43. This is a high value indicating a heavy dependency on external financing.
PRGS has a worse Debt to Equity ratio (2.43) than 80.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.43 | ||
| Debt/FCF | 8.55 | ||
| Altman-Z | 1.11 |
ROIC/WACC0.89
WACC9.36%
2.3 Liquidity
PRGS has a Current Ratio of 0.43. This is a bad value and indicates that PRGS is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.43, PRGS is doing worse than 91.84% of the companies in the same industry.
A Quick Ratio of 0.43 indicates that PRGS may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.43, PRGS is doing worse than 91.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.43 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.37% over the past year.
Measured over the past years, PRGS shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.88% on average per year.
PRGS shows a strong growth in Revenue. In the last year, the Revenue has grown by 22.10%.
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)19.37%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%28.44%
Revenue 1Y (TTM)22.1%
Revenue growth 3Y12.35%
Revenue growth 5Y12.76%
Sales Q2Q%35.57%
3.2 Future
PRGS is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.24% yearly.
The Revenue is expected to grow by 7.74% on average over the next years.
EPS Next Y10.74%
EPS Next 2Y8.53%
EPS Next 3Y7.24%
EPS Next 5YN/A
Revenue Next Year29.11%
Revenue Next 2Y14.59%
Revenue Next 3Y10.05%
Revenue Next 5Y7.74%
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.
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
With a Price/Earnings ratio of 9.34, the valuation of PRGS can be described as very reasonable.
Based on the Price/Earnings ratio, PRGS is valued cheaply inside the industry as 92.91% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of PRGS to the average of the S&P500 Index (27.41), we can say PRGS is valued rather cheaply.
A Price/Forward Earnings ratio of 8.52 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 93.97% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of PRGS to the average of the S&P500 Index (35.19), we can say PRGS is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.34 | ||
| Fwd PE | 8.52 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PRGS indicates a rather cheap valuation: PRGS is cheaper than 90.43% of the companies listed in the same industry.
PRGS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PRGS is cheaper than 93.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.51 | ||
| EV/EBITDA | 11.74 |
4.3 Compensation for Growth
PRGS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of PRGS may justify a higher PE ratio.
PEG (NY)0.87
PEG (5Y)0.72
EPS Next 2Y8.53%
EPS Next 3Y7.24%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.38%, PRGS has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 24.07, PRGS pays a better dividend. On top of this PRGS pays more dividend than 94.33% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, PRGS's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.38% |
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
27.77% of the earnings are spent on dividend by PRGS. This is a low number and sustainable payout ratio.
PRGS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP27.77%
EPS Next 2Y8.53%
EPS Next 3Y7.24%
NASDAQ:PRGS (7/14/2025, 12:16:51 PM)
49.48
-0.14 (-0.28%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners117.99%
Inst Owner Change0.61%
Ins Owners1.64%
Ins Owner Change5.75%
Market Cap2.13B
Analysts83.08
Price Target74.29 (50.14%)
Short Float %13.24%
Short Ratio11.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.38% |
Yearly Dividend0.72
Dividend Growth(5Y)3.19%
DP27.77%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.47%
Min EPS beat(2)5.42%
Max EPS beat(2)21.52%
EPS beat(4)4
Avg EPS beat(4)10.7%
Min EPS beat(4)5.42%
Max EPS beat(4)21.52%
EPS beat(8)8
Avg EPS beat(8)9.79%
EPS beat(12)12
Avg EPS beat(12)8.88%
EPS beat(16)16
Avg EPS beat(16)11.82%
Revenue beat(2)0
Avg Revenue beat(2)-1.5%
Min Revenue beat(2)-2.03%
Max Revenue beat(2)-0.97%
Revenue beat(4)0
Avg Revenue beat(4)-0.91%
Min Revenue beat(4)-2.03%
Max Revenue beat(4)-0.24%
Revenue beat(8)1
Avg Revenue beat(8)-0.39%
Revenue beat(12)3
Avg Revenue beat(12)-0.29%
Revenue beat(16)6
Avg Revenue beat(16)0.49%
PT rev (1m)0%
PT rev (3m)-0.23%
EPS NQ rev (1m)0.6%
EPS NQ rev (3m)0.6%
EPS NY rev (1m)1.05%
EPS NY rev (3m)5.81%
Revenue NQ rev (1m)0.74%
Revenue NQ rev (3m)0.74%
Revenue NY rev (1m)0.32%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.34 | ||
| Fwd PE | 8.52 | ||
| P/S | 2.45 | ||
| P/FCF | 12.51 | ||
| P/OCF | 12.1 | ||
| P/B | 4.71 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.74 |
EPS(TTM)5.3
EY10.71%
EPS(NY)5.81
Fwd EY11.74%
FCF(TTM)3.96
FCFY7.99%
OCF(TTM)4.09
OCFY8.26%
SpS20.16
BVpS10.5
TBVpS-34.6
PEG (NY)0.87
PEG (5Y)0.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.39% | ||
| ROE | 12.72% | ||
| ROCE | 10.32% | ||
| ROIC | 8.29% | ||
| ROICexc | 8.83% | ||
| ROICexgc | N/A | ||
| OM | 19.74% | ||
| PM (TTM) | 6.63% | ||
| GM | 81.69% | ||
| FCFM | 19.62% |
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-Score6
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.43 | ||
| Debt/FCF | 8.55 | ||
| Debt/EBITDA | 3.69 | ||
| Cap/Depr | 4.54% | ||
| Cap/Sales | 0.66% | ||
| Interest Coverage | 3.64 | ||
| Cash Conversion | 59.18% | ||
| Profit Quality | 296.12% | ||
| Current Ratio | 0.43 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z | 1.11 |
F-Score6
WACC9.36%
ROIC/WACC0.89
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)19.37%
EPS 3Y8.4%
EPS 5Y12.88%
EPS Q2Q%28.44%
EPS Next Y10.74%
EPS Next 2Y8.53%
EPS Next 3Y7.24%
EPS Next 5YN/A
Revenue 1Y (TTM)22.1%
Revenue growth 3Y12.35%
Revenue growth 5Y12.76%
Sales Q2Q%35.57%
Revenue Next Year29.11%
Revenue Next 2Y14.59%
Revenue Next 3Y10.05%
Revenue Next 5Y7.74%
EBIT growth 1Y33.68%
EBIT growth 3Y7.51%
EBIT growth 5Y16.84%
EBIT Next Year74.16%
EBIT Next 3Y20.7%
EBIT Next 5YN/A
FCF growth 1Y1.26%
FCF growth 3Y5.88%
FCF growth 5Y10.63%
OCF growth 1Y1%
OCF growth 3Y5.82%
OCF growth 5Y10.48%