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Investing.com - Barclays (LON:BARC) has reiterated its Underweight rating and $562.00 price target on Roper Industries (NASDAQ:ROP) following the company’s second-quarter earnings report. Currently trading at $551.67, the stock carries a P/E ratio of 39.7x and shows high valuation multiples across various metrics, according to InvestingPro data.
The investment bank noted that Roper’s organic growth rate in software is currently running at a mid-single-digit rate, while management indicated on its earnings call that a high-single-digit rate of 7-8% is possible or expected. As a prominent player in the software industry, the company has demonstrated strong revenue growth of 13.3% over the last twelve months, with InvestingPro analysis showing an overall financial health score of "GOOD."
Barclays estimates that Roper has added approximately $1.4 billion in acquired software sales since 2022, excluding the recent Subsplash acquisition, equivalent to 20-25% of its projected 2025 overall software sales.
The firm pointed out that Roper’s recent acquisitions have targeted higher-growth businesses compared to its historical pre-Covid strategy, with many targets having organic sales growth rates of 10% or higher at announcement.
Barclays suggested this acquisition strategy indicates that the base 70%+ of Roper’s software sales business is only growing at a low-single-digit rate, which may require management to continue "paying up" for higher-growth software acquisitions to achieve stated growth goals.
In other recent news, Roper Technologies reported strong second-quarter 2025 financial results, surpassing analyst expectations. The company achieved earnings per share of $4.87, exceeding forecasts by $0.04, and reported revenue of $1.94 billion, which was $10 million above projections. Roper’s adjusted EBITDA reached $775 million, with margins slightly above expectations at 39.9%. The company maintained its organic growth outlook of 6-7% and raised its overall guidance for the year, supported by solid margins and strategic acquisitions. Roper announced an $800 million acquisition of Subsplash, a software provider for faith-based organizations, which is expected to contribute $115 million in revenue by the end of Q3 2026. Analyst firm Raymond (NSE:RYMD) James reiterated its Strong Buy rating for Roper, noting the company’s improved growth in Network Solutions and stronger free cash flow. The firm also highlighted potential future upside from favorable comparisons and integration of recent acquisitions, despite policy uncertainties in certain markets.
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