PRGSProgress Software program$54.07 -0.17 (-0.31%) (As of 02:45 PM ET)52-Week Vary$48.00▼$62.34Dividend Yield1.29percentP/E Ratio32.97Price Goal$63.14
Progress Software program NASDAQ: PRGS is a know-how firm throughout the methods software program sub-industry. The inventory reached its 2024 low on Jun. 20, when it was down practically 11% yr so far. The agency reported its second-quarter monetary outcomes on Jun. 25, 2024, and is again within the inexperienced, now up nearly 2% on the yr. The agency’s outcomes impressed the market, with the inventory taking pictures up practically 13% on the day following the discharge. Let’s discover Progress Software program’s merchandise, latest monetary outcomes, and outlook to grasp whether or not this can be a identify to contemplate including.
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The agency’s 2023 annual monetary report, or Kind 10-Okay, gives descriptions of 12 completely different software program merchandise the agency presents. The agency’s fundamental merchandise permit software program builders to create, deploy, and handle their purposes extra effectively. It additionally gives software program that permits safe file switch and an answer that permits knowledge sharing between completely different purposes. A few of the most notable merchandise embody Progress OpenEdge, Progress Chef, and Progress Developer Instruments. Many of those merchandise are AI-powered.
The agency monetizes these merchandise primarily via perpetual licenses, which permit using the software program indefinitely. It additionally presents renewable time period licenses on some merchandise and a subscription mannequin for its cloud-based choices. Together with its licenses, the agency additionally gives product upkeep that provides entry to software program updates and technical help. Purchasers of perpetual licenses have the choice, however not the requirement, so as to add upkeep help. The agency really makes the vast majority of its revenues from its upkeep companies. 58% of whole income got here from this stream in 2023.
Progress doesn’t establish any direct opponents in its annual submitting, however some corporations that supply comparable merchandise embody Amazon (NASDAQ: AMZN), Microsoft NASDAQ: MSFT, and Oracle NYSE: ORCL.
Progress Software program’s Spectacular Monetary Outcomes: Surpassing Expectations
Outcomes surpassed expectations on many fronts. Second-quarter revenues had been $175 million, beating out the $170 million steering midpoint and the $169 million consensus estimate. Earnings per share (EPS) additionally beat expectations, coming in at $1.09, nicely above the steering midpoint and consensus estimate of $0.95.
Different important measures shined as nicely. Annual recurring income (ARR) was $579 million. This measures the worth of all contractually binding agreements the agency has in place. Contracts present a dependable income, ensured by their authorized binding. About 83% of the agency’s whole income comes from yearly recurring sources. The Web Retention Charge was 99%, which measures the agency’s potential to resume or substitute annual recurring income.

Days Gross sales Excellent (DSO) has additionally been persistently bettering. DSO measures what number of days it takes to transform gross sales bought on credit score into money.  DSO was at 50 days in Q2 2023 and dropped to 44 days in Q1 2024. It fell once more to 41 days in Q2 2024. This exhibits the agency is getting paid by prospects sooner and is persistently turning into extra succesful in that space. Lastly, adjusted free money circulation grew by 33% from Q2 2023. General, this was a formidable report from Progress.
Progress Software program’s Steerage and Outlook: Elevated 2024 Income and EPS Projections
Not solely did Progress present spectacular backward-looking outcomes, nevertheless it additionally raised its future expectations. The corporate raised its fiscal yr 2024 income steering by $3 million and elevated its EPS by 5 cents. Analysts are bullish on the inventory, with 5 purchase rankings and two holds.
The common value forecast sits at $63.14, implying a 15% upside. The agency has a projected earnings development charge of 9%, on the low facet relative to its {industry}.
General MarketRank™4.00 out of 5 Analyst RatingModerate Purchase Upside/Downside14.7% Upside Brief InterestBearish Dividend StrengthModerate Sustainability-0.67 Information Sentiment0.56 Insider TradingSelling Shares Projected Earnings Growth9.09% See Full Particulars
Within the agency’s quarterly earnings convention name, executives detailed the initiatives the agency is pursuing going ahead. These embody additional integrating generative AI into its merchandise and utilizing AI internally to optimize the corporate’s operations.
The agency can also be actively concerned in M&A exercise. It’s presently conducting due diligence on the potential acquisition of Irish software program firm MariaDB.

Progress Software program’s latest earnings report was spectacular, however the modest implied upside and projected development are regarding. Nonetheless, the agency has made a behavior of persistently beating its estimates, so it is attainable it might probably do significantly better than analysts count on over the long run.Earlier than you contemplate Oracle, you may wish to hear this.MarketBeat retains monitor of Wall Road’s top-rated and greatest performing analysis analysts and the shares they advocate to their purchasers every day. MarketBeat has recognized the 5 shares that high analysts are quietly whispering to their purchasers to purchase now earlier than the broader market catches on… and Oracle wasn’t on the record.Whereas Oracle presently has a “Average Purchase” score amongst analysts, top-rated analysts consider these 5 shares are higher buys.View The 5 Shares Right here Click on the hyperlink under and we’ll ship you MarketBeat’s record of seven greatest retirement shares and why they need to be in your portfolio. Get This Free Report

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