Progress Software (PRGS) AI Stock Analysis

• Market Cap: $2.50B
• Dividend Yield: 1.21%
• Average Volume (3M): 783.98K
• Price to Earnings (P/E): 45.0
• Beta (1Y): 0.46
• Revenue Growth: 12.85%
• EPS Growth: -16.89%
• Country: US
• Employees: 2,815
• Sector: Technology
• Sector Strength: 39
• Industry: Software - Application
• EPS (TTM): 1.29
• Shares Outstanding: 43,025,993
• 10 Day Avg. Volume: 1,174,552
• 30 Day Avg. Volume: 783,975
• PEG Ratio: 6.76
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.13
• Price to Cash Flow (P/CF): 30.00
• P/FCF Ratio: 35.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $72.57
• Price Target Upside: 25.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Progress Software's overall stock score is driven by strong financial performance and positive earnings call outcomes, particularly the successful integration of ShareFile and robust revenue growth. While technical indicators suggest mixed momentum, the relatively high valuation may limit upside potential. The company's strong operational execution and strategic focus on AI and SaaS present promising prospects.

Progress Software Business Overview & Revenue Model

Company Description

Progress Software Corporation develops, deploys, and manages business applications. The company offers OpenEdge, a development software, which builds multi-language applications for secure deployment across various platforms and devices, as well as cloud; developer tools that consists of components for user interface development for Web, mobile, desktop, chat, and AR/VR apps, as well as automated application testing and reporting tools; Sitefinity, a web content management and customer analytics platform; Corticon, a business rules management system that provides applications with decision automation and change process, and decision-related insight capabilities. It also offers DataDirect Connect, which provides data connectivity using industry-standard interfaces to connect applications running on various platforms; MOVEit that offers secure collaboration and automated file transfers of critical business information; Chef, an infrastructure automation platform to build, deploy, manage, and secure applications in multi-cloud and hybrid environments, and on-premises; and WhatsUp Gold, a network monitoring solution. In addition, the company provides Kemp LoadMaster, a load balancing solutions; and Kemp Flowmon network performance monitoring and diagnostic solutions that collect and analyze network telemetry from various sources. Further, it provides project management, implementation, custom development, programming, and other services, as well as web-enable applications; and training services. The company sells its products to end users, independent software vendors, original equipment manufacturers, and system integrators. It has operations in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1981 and is headquartered in Burlington, Massachusetts.

How the Company Makes Money

Progress Software generates revenue primarily through the sale of software licenses, subscriptions, and support services. The company offers its products on a perpetual license basis, as well as through subscription models, allowing customers to choose the best fit for their needs. Additionally, Progress provides maintenance and support services, which contribute significantly to its recurring revenue streams. The company leverages strategic partnerships and acquisitions to expand its product portfolio and market reach, further enhancing its revenue-generating capabilities.

Progress Software Financial Statement Overview

Summary

Progress Software shows strong revenue growth and efficient cash flow management with robust margins. However, increased liabilities warrant careful monitoring.

Income Statement

Progress Software has consistently demonstrated strong revenue growth over the years, with a notable increase in total revenue from $442 million in 2020 to $753 million in 2024. The gross profit margin remains healthy, hovering above 80%, indicating strong cost management. However, the net profit margin has shown some fluctuation, reflecting operational challenges or increased expenses. The EBIT and EBITDA margins are robust, showing consistent operational efficiency.

Balance Sheet

The company's balance sheet exhibits a moderate debt-to-equity ratio, which suggests a balanced approach to leveraging debt for growth. Stockholders' equity has increased over the years, though the equity ratio has slightly declined, indicating increased reliance on liabilities. Return on Equity (ROE) is decent, reflecting the company's ability to generate returns from shareholders' investments. There is a need to closely monitor liabilities as they have significantly increased alongside assets.

Cash Flow

The cash flow statement reflects strong operating cash flow, consistently growing from $144 million in 2020 to $211 million in 2024. Free cash flow has also shown healthy growth, supporting the company’s ability to reinvest in its operations or return value to shareholders. The Operating Cash Flow to Net Income and Free Cash Flow to Net Income ratios indicate efficient cash flow management. However, a significant uptick in investing cash flow outlays may require evaluation of investment strategies.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
753.41M	694.44M	602.01M	531.31M	442.15M
	Gross Profit
622.93M	567.86M	507.52M	452.86M	380.04M
	EBIT
124.00M	110.52M	132.13M	116.10M	107.73M
	EBITDA
124.00M	213.38M	214.77M	178.93M	149.50M
	Net Income Common Stockholders
68.44M	70.20M	95.07M	78.42M	79.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
118.08M	126.96M	251.76M	157.37M	106.00M
	Total Assets
2.53B	1.60B	1.41B	1.36B	1.04B
	Total Debt
831.73M	747.11M	640.59M	591.35M	416.48M
	Net Debt
713.65M	620.15M	384.31M	435.94M	318.49M
	Total Liabilities
2.09B	1.14B	1.01B	951.05M	695.77M
	Stockholders Equity
438.79M	459.71M	393.99M	412.49M	346.01M
Cash Flow		Free Cash Flow
206.29M	168.35M	186.07M	173.88M	138.33M
	Operating Cash Flow
211.49M	173.92M	192.16M	178.53M	144.85M
	Investing Cash Flow
-857.91M	-360.38M	-6.09M	-258.62M	-218.69M
	Financing Cash Flow
640.82M	51.19M	-91.68M	131.46M	6.15M

Progress Software Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 57.99
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRGS, the sentiment is Positive. The current price of 57.99 is above the 20-day moving average (MA) of 55.14, above the 50-day MA of 55.77, and below the 200-day MA of 59.97, indicating a neutral trend. The MACD of -0.67 indicates Negative momentum. The RSI at 58.70 is Neutral, neither overbought nor oversold. The STOCH value of 37.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRGS.

Progress Software Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRGS	78 Outperform	$2.50B	45.00	12.70%	1.21%	12.85%	-16.89%
DV	66 Neutral	$2.10B	39.10	5.21%	―	14.72%	-22.00%
TDC	65 Neutral	$2.05B	18.26	85.07%	―	-4.53%	93.29%
FORM	63 Neutral	$1.96B	28.46	7.50%	―	15.16%	-15.16%
TTMI	61 Neutral	$1.91B	34.68	3.66%	―	9.41%	―
RNG	60 Neutral	$2.30B	―	16.58%	―	8.99%	63.84%
Sector *	57 Neutral	$20.94B	10.43	-13.41%	2.52%	4.53%	-23.34%

Progress Software Corporate Events

Progress Software Reports Strong Q1 Fiscal 2025 Results

Progress announced its financial results for the first quarter of fiscal 2025, ending February 28, 2025. The company reported a 29% year-over-year increase in revenue to $238 million and a 48% increase in annualized recurring revenue to $836 million. The ShareFile integration is progressing well, contributing to revenue growth and expense savings. Despite a decrease in GAAP diluted earnings per share, non-GAAP diluted earnings per share increased by 5%. The company repurchased $30 million of shares and paid down $30 million of its revolving credit line. Progress’s strong performance reflects steady demand and effective cost management, with a positive outlook for the remainder of the fiscal year.

Progress Software Reports Strong Growth and Acquisition

In its fiscal fourth quarter and full year results for 2024, Progress Software reported significant financial growth, with an annualized recurring revenue increase of 46% year-over-year and cash flow from operations growing by 22%. The company completed the acquisition of ShareFile, a SaaS-native AI-powered collaboration platform, and plans to utilize the capital from its suspended dividend payment toward debt repayment and future investments. This strategic move is expected to enhance Progress’s market position and drive meaningful synergies.