Roper Technologies Inc (NASDAQ: ROP)

Sector: Technology Industry: Software - Application CIK: 0000882835
Market Cap 32.69 Bn
P/B 3.91
P/E 29.08
P/S 6.15
ROIC (Qtr) 6.00
Div Yield % 0.86
Rev 1y % (Qtr) 14.33
Total Debt (Qtr) 9.45 Bn
Debt/Equity (Qtr) 0.47
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About

Roper Technologies, Inc., a prominent player in the technology industry, is publicly listed under the ticker symbol ROP and has built a reputation for consistent growth and shareholder value creation. The company's operations span across various sectors, including application software, network software, and technology-enabled products. Roper's Application Software segment is a robust provider of comprehensive management software solutions. Its offerings cater to a wide range of industries, including legal and professional services, higher education,...

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Investment thesis

Bull case

  • Operating cash flow of 2.52B provides strong 15.61x coverage of stock compensation 161.70M, indicating sustainable incentive practices.
  • Robust free cash flow of 2.41B exceeds capital expenditure of 118.80M by 20.25x, indicating strong organic growth funding capability.
  • Operating cash flow of 2.52B fully covers other non-current liabilities 503.20M by 5.02x, showing strong long-term stability.
  • Operating cash flow of 2.52B provides strong 17.93x coverage of inventory 140.80M, indicating efficient inventory management.
  • Retained earnings of 16.88B provide full 1.84x coverage of long-term debt 9.15B, indicating strong internal capital position.

Bear case

  • Operating cash flow of 2.52B barely covers its investment activities of (3.29B), with a coverage ratio of -0.77, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.52B provides thin coverage of dividend payments of (346.80M) with a -7.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 320M provide limited coverage of acquisition spending of (3.43B), which is -0.09x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 2.52B provides insufficient coverage of deferred revenue obligations of 1.81B, which is 1.40x, raising concerns about future service delivery capabilities.
  • High receivables of 1.05B relative to inventory of 140.80M (7.47 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 235.43 Bn 27.31 5.44 9.50 Bn
2 SHOP Shopify Inc. 147.12 Bn 119.52 12.73 0.19 Bn
3 UBER Uber Technologies, Inc 147.10 Bn 14.63 2.83 12.08 Bn
4 CRM Salesforce, Inc. 122.20 Bn 594.48 15.45 11.14 Bn
5 INTU Intuit Inc. 113.93 Bn 178.01 32.63 6.78 Bn
6 ADBE Adobe Inc. 111.00 Bn 15.57 4.67 6.65 Bn
7 NOW ServiceNow, Inc. 109.54 Bn 62.67 8.25 2.40 Bn
8 ADP Automatic Data Processing Inc 86.44 Bn 20.41 4.07 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.06 2.08
EV to Cash from Ops. EV/CFO 24.97 11.38
EV to Debt EV to Debt 3.89 47.67
EV to EBIT EV/EBIT 23.65 6.78
EV to EBITDA EV/EBITDA 24.46 7.15
EV to Free Cash Flow [EV/FCF] EV/FCF 26.11 14.44
EV to Market Cap EV to Market Cap 1.13 -8.88
EV to Revenue EV/Rev 6.93 4.04
Price to Book Value [P/B] P/B 3.91 3.65
Price to Earnings [P/E] P/E 29.08 -117.75
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.53 -4.05
Dividend Payout Ratio % Div Payout % (Qtr) 22.10 4.38
Dividend per Basic Share Div per Share (Qtr) 3.30 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 14.76 2.48
Interest Coverage Int. cover (Qtr) 7.59 -43.57
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -4.12 -222.46
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 18.69 281.53
Dividend Growth (1y) % Div 1y % (Qtr) 10.00 1.78
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 8.64 -327.55
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.12 30.09
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.12 -213.00
EBT Growth (1y) % EBT 1y % (Qtr) 6.85 -86.84
EPS Growth (1y) % EPS 1y % (Qtr) 6.02 108.58
FCF Growth (1y) % FCF 1y % (Qtr) 10.42 6.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.78 94.58
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.22 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.13 0.02
Cash Ratio Cash Ratio (Qtr) 0.10 3.78
Current Ratio Curr Ratio (Qtr) 0.58 8.27
Debt to Equity Ratio Debt/Equity (Qtr) 0.47 0.14
Interest Cover Ratio Int Coverage (Qtr) 7.59 -43.57
Times Interest Earned Times Interest Earned (Qtr) 7.59 -43.57
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 30.20 -105.03
EBIT Margin % EBIT Margin % (Qtr) 29.72 -130.16
EBT Margin % EBT Margin % (Qtr) 25.80 -121.17
Gross Margin % Gross Margin % (Qtr) 69.00 58.37
Net Profit Margin % Net Margin % (Qtr) 20.30 -126.13