Stifel cuts Roper Industries target to $650, maintains Buy rating

On Tuesday, Stifel analysts adjusted their stance on Roper Industries (NASDAQ:ROP), reducing the price target to $650 from the previous $685 while retaining a Buy rating on the stock. The firm’s analysts highlighted Roper’s strong performance in the first quarter, with revenue growth of 12% year-over-year and a 5% organic increase, aligning with market expectations. The earnings per share (EPS) also surpassed forecasts, bolstered by margin expansion in the Technology Enabled Products (TEP) segment. According to InvestingPro data, Roper maintains strong profitability with a 69.3% gross margin and has achieved impressive revenue growth of 13.94% over the last twelve months.

Roper’s management has revised its full-year 2025 (FY25) revenue growth outlook upwards to 12% from an earlier estimate of 10%, following the successful acquisition of CentralReach. This upgrade comes despite the organic growth projections remaining steady at 6-7%. The company has also increased its FY25 diluted earnings per share (DEPS) guidance by $0.20 per share, even after accounting for a $0.15 per share dilution resulting from the CentralReach deal. With a market capitalization of $59.75 billion and a track record of raising dividends for 11 consecutive years, Roper demonstrates strong financial stability. For deeper insights into Roper’s valuation and growth metrics, check out the comprehensive analysis available on InvestingPro, which features 12 additional exclusive tips about the company.

The report from Stifel also noted Roper’s strong position in terms of mergers and acquisitions (M&A) potential, with over $5 billion in liquidity. This financial capability is seen as a key factor in Roper’s strategy to acquire unique software assets, which is particularly pertinent as private equity firms may turn to sales in light of a stagnant initial public offering (IPO) market.

Stifel’s analysts believe that Roper Industries presents a stable investment opportunity amidst current market volatility, thanks to its consistent track record of compounding free-cash-flow and a diversified and resilient business model. The revised price target of $650 is based on an approximate 26 times the estimated 2026 price to free-cash-flow (P/FCF) ratio, taking into account the broader market’s multiple compression.

In other recent news, Roper Technologies Inc. reported strong financial results for the first quarter of 2025, surpassing earnings per share (EPS) expectations with a result of $4.78, slightly above the forecasted $4.74. The company recorded a total revenue of $1.9 billion, reflecting a 12% year-over-year growth, and increased its full-year revenue guidance from 10% to 12%. Additionally, Roper Technologies completed a significant acquisition of Central Reach for $1.65 billion, which is expected to contribute to its growth trajectory. Despite these positive developments, the company’s stock experienced a 1.34% decline in pre-market trading, possibly due to broader market conditions and concerns over acquisition costs.

Analysts have noted that Roper’s strategic focus on recurring software revenues and high retention rates has bolstered its financial performance. The acquisition of Central Reach is anticipated to enhance Roper’s software offerings, with Central Reach projected to deliver around $175 million in revenue and $75 million in EBITDA by mid-2026. The company has also raised its full-year EPS guidance, expecting adjusted EPS to range between $4.80 and $4.84 for the second quarter. Roper Technologies continues to explore further merger and acquisition opportunities, with over $5 billion available for capital deployment over the next twelve months.

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