Street Calls of the Week
Investing.com - DA Davidson reiterated a Buy rating on Progress Software (NASDAQ:PRGS), a $2.51 billion software company, while raising its price target to $75.00 from its previous target. The stock currently trades at $58.22, with analysts’ targets ranging from $60 to $83.
The research firm cited Progress Software’s consistent business strength in its latest quarterly report as a key factor behind the maintained positive outlook. According to InvestingPro data, the company boasts impressive gross profit margins of 85.71% and has achieved 22.1% revenue growth in the last twelve months.
Progress Software recently announced its acquisition of Nuclia, a Retrieval-Augmented Generation (RAG) as a service provider, which DA Davidson notes will provide complementary capabilities across the entire Progress platform. InvestingPro analysis indicates the company maintains a GOOD financial health score, with 8 additional ProTips available for subscribers.
The integration of ShareFile, a previous acquisition, is tracking ahead of schedule according to the research firm’s assessment.
DA Davidson expressed confidence that Progress Software can continue to deliver strong inorganic growth while maintaining low organic growth rates and what it describes as "best-in-class" margins.
In other recent news, Progress Software Corporation reported its second-quarter earnings for fiscal year 2025, delivering an earnings per share (EPS) of $1.40, which exceeded analyst expectations of $1.30. However, the company’s revenue came in at $237 million, slightly below the forecasted $237.53 million. Progress Software highlighted a significant 36% year-over-year increase in revenue and a robust 46% growth in Annual Recurring Revenue (ARR), reaching $838 million. The company also maintained a strong operating margin of 40%. In terms of strategic moves, Progress Software announced the acquisition of Nuclea for $20 million, aiming to enhance its product portfolio with advanced AI capabilities. This acquisition aligns with the company’s focus on integrating AI across its offerings. Additionally, Progress Software has raised its full-year 2025 revenue guidance to between $962 million and $974 million, with an EPS range of $5.28 to $5.40. The company’s commitment to disciplined mergers and acquisitions and product innovation remains a key focus for sustaining growth.
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