Progress Software (PRGS) AI Stock Analysis

• Market Cap: $1.35B
• Dividend Yield: N/A
• Average Volume (3M): 1.08M
• Price to Earnings (P/E): 24.7
• Beta (1Y): 0.39
• Revenue Growth: 31.41%
• EPS Growth: -40.89%
• Country: US
• Employees: 2,815
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.51
• Shares Outstanding: 42,113,647
• 10 Day Avg. Volume: 675,114
• 30 Day Avg. Volume: 1,079,498
• PEG Ratio: 3.25
• Price to Book (P/B): 3.77
• Price to Sales (P/S): 1.84
• P/FCF Ratio: 7.86
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 2.18
• Enterprise Value/Gross Profit: 2.70
• Enterprise Value/Ebitda: 13.36
• 1Y Price Target: $61.25
• Price Target Upside: 82.18% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 5.88
• Revenue Forecast (FY): $993.34M

• Rating: 67 Neutral
• Price Target: $36.00 ▲(7.08% Upside)
• Action: Reiterated Date: 01/22/26
• Date: Action: Reiterated 01/22/26

The score is driven primarily by strong cash flow and constructive FY26 guidance, offset by balance-sheet leverage risk and modest organic ARR growth. Technical signals are mixed-to-soft (negative MACD and below longer-term averages), and valuation looks only moderate with a mid-20s P/E and no dividend yield provided.

Positive Factors

Strong cash generation

Consistent, improving free cash flow demonstrates durable earnings quality and cash conversion. High FCF enables internal investment, debt paydown, share repurchases and cushions cyclical weakness, supporting sustained funding for product development and strategic initiatives over the next several years.

High recurring revenue mix

A large, recurring ARR base with 100% net retention provides durable revenue visibility and reduces cyclicality. With ARR comprising most revenue, renewal predictability supports margin stability, planning for R&D and sales investments, and steady cash flow even if new-sales growth moderates.

M&A integration & product innovation

Successful integration of acquisitions and rapid AI product rollouts signal operational execution and growing product breadth. This strengthens competitive positioning, expands cross-sell opportunities, and embeds AI capabilities into core offerings—structural advantages that can lift long-term revenue mix and customer value.

Negative Factors

Modest organic ARR growth

Low organic ARR expansion limits the company's ability to grow revenue without acquisitions. Over time, subpar organic growth pressures operating leverage and reduces upside from product improvements, increasing dependence on M&A to hit aggregate revenue targets and sustain long-term growth rates.

Elevated leverage

High absolute debt and near-term refinancing/repayment tasks constrain financial flexibility. Elevated leverage limits ability to fund organic projects or opportunistic M&A, raises covenant and interest exposure, and makes results more sensitive to cash-collection slippage or margin pressures over a multi-quarter horizon.

Rising cost base & working-capital pressure

A materially higher cost base combined with longer DSO (collections deterioration) compresses free cash flow and margin upside. Persistently elevated operating expenses reduce return on incremental revenue and make leveraging fixed-cost scale harder unless organic ARR growth and monetization of AI meaningfully accelerate.

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 primarily makes money by licensing its enterprise software products and providing ongoing maintenance and support, with revenue typically recurring through renewals and subscriptions. Key revenue streams include: (1) software licenses and subscriptions for its product lines (e.g., application development and runtime platforms, data connectivity/integration products, and digital experience solutions), where customers pay for the right to use the software either via term-based subscription or other licensing arrangements; (2) maintenance and support contracts that provide access to updates, upgrades, and technical support, commonly renewed annually and forming a meaningful recurring base; and (3) professional services, such as consulting, implementation, training, and other services that help customers deploy, integrate, and optimize Progress products. The company also sells through channel partners (e.g., resellers, systems integrators, and cloud/technology partners), which can expand distribution and drive product adoption; specific partnership terms and revenue contributions are not available here and are therefore null.

Progress Software Financial Statement Overview

Summary

Strong and improving cash generation (high cash-flow score) and steady revenue growth support the profile, but the balance sheet is a material constraint due to historically high leverage, even with reported debt reduction progress.

Income Statement

Revenue has grown steadily across the period, with 2025 revenue up meaningfully versus 2024 and positive growth rates throughout. Profitability remains solid with strong gross profit generation, but the profit profile has softened versus earlier years (net income and operating profit as a share of revenue were stronger in 2020–2022 than in 2023–2024). Overall, the business shows consistent top-line momentum with some margin normalization.

Balance Sheet

Leverage is the key constraint. Debt levels and debt-to-equity were elevated in 2024 (high leverage relative to equity), and while 2025 shows a much lower debt balance versus 2024, absolute debt remains sizable. Equity is positive and has been fairly stable, but the balance sheet still carries meaningful financial risk given the historical reliance on debt funding.

Cash Flow

Cash generation is a clear strength. Operating cash flow and free cash flow are consistently strong, with free cash flow closely tracking net income and improving notably in 2025 (strong free-cash-flow growth versus 2024). While there was a decline in free cash flow in 2023, the broader trend is healthy and indicates good earnings quality and cash conversion.

Breakdown	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	977.83M	753.41M	694.44M	602.01M	531.31M
Gross Profit	790.25M	622.93M	567.86M	507.52M	452.86M
EBITDA	159.52M	229.32M	213.58M	207.78M	168.56M
Net Income	73.13M	68.44M	70.20M	95.07M	78.42M
Balance Sheet
Total Assets	2.46B	2.53B	1.60B	1.41B	1.36B
Cash, Cash Equivalents and Short-Term Investments	94.81M	118.08M	126.96M	256.28M	157.37M
Total Debt	850.99M	1.56B	747.11M	640.59M	591.35M
Total Liabilities	1.98B	2.09B	1.14B	1.01B	951.05M
Stockholders Equity	478.35M	438.79M	459.71M	398.50M	412.49M
Cash Flow
Free Cash Flow	229.49M	206.29M	168.35M	186.07M	173.88M
Operating Cash Flow	235.19M	211.49M	173.92M	192.16M	178.53M
Investing Cash Flow	-26.92M	-857.91M	-360.38M	21.99M	-250.34M
Financing Cash Flow	-238.37M	640.82M	51.19M	-101.42M	132.11M

Progress Software Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 33.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRGS, the sentiment is Negative. The current price of 33.62 is below the 20-day moving average (MA) of 38.23, below the 50-day MA of 39.94, and below the 200-day MA of 45.54, indicating a bearish trend. The MACD of -1.58 indicates Positive momentum. The RSI at 31.55 is Neutral, neither overbought nor oversold. The STOCH value of 1.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRGS.

Progress Software Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRGS	67 Neutral	$1.35B	24.66	15.89%	―	31.41%	-40.89%
CXM	67 Neutral	$1.47B	69.87	3.93%	―	6.48%	168.94%
RNG	66 Neutral	$3.12B	57.31	-8.90%	―	5.45%	―
DBD	65 Neutral	$2.51B	26.41	8.82%	―	-2.86%	985.78%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AMPL	61 Neutral	$942.77M	-17.26	-32.90%	―	12.78%	-20.47%

Progress Software Corporate Events

Progress Software posts strong Q4 and fiscal 2025 results

On January 20, 2026, Progress Software reported that revenue for its fiscal fourth quarter ended November 30, 2025, rose 18% year over year to $253 million, with annualized recurring revenue reaching $852 million, up 2% on a constant-currency basis, while GAAP operating margin improved to 15% and diluted EPS jumped to $0.59 from $0.03, underscoring strong profitability gains. For the full fiscal year 2025, revenue grew 30% to $978 million and GAAP diluted EPS increased 8% to $1.66, supported by the completed integration of the ShareFile acquisition, robust performance across the product set, and AI-driven customer projects; the company also generated $235 million in operating cash flow and strengthened shareholder returns with a $200 million increase in its share repurchase authorization in September 2025, positioning it for continued ARR growth and a solid start to fiscal 2026.

The most recent analyst rating on (PRGS) stock is a Buy with a $54.00 price target. To see the full list of analyst forecasts on Progress Software stock, see the PRGS Stock Forecast page.