Progress Software (PRGS) AI Stock Analysis

• Market Cap: $1.72B
• Dividend Yield: N/A
• Average Volume (3M): 714.38K
• Price to Earnings (P/E): 24.4
• Beta (1Y): 0.25
• 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: 1,273,131
• 30 Day Avg. Volume: 714,378
• 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: 1.48
• Enterprise Value/Revenue: 2.59
• Enterprise Value/Gross Profit: 3.21
• Enterprise Value/Ebitda: 15.88
• 1Y Price Target: $61.25
• Price Target Upside: 50.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 5.66
• Revenue Forecast (FY): $992.48M

• Rating: 67 Neutral
• Price Target: $46.00 ▲(12.94% Upside)

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

Free cash flow strength

Consistent and improving free cash flow (FY25 adj. FCF $247M, Q4 $62M) shows durable cash conversion that underpins debt reduction, buybacks, and product investment. Management’s FY26 FCF guidance and prior trend support sustained financial flexibility over the next 2–6 months.

High recurring revenue mix and retention

A large, recurring revenue base (ARR >87%) with a 100% net retention rate enhances revenue predictability and cash visibility. This structural mix supports margin visibility, subscription renewals, and long-term customer value, making near-term cashflows and planning more resilient.

Acquisition integration and AI product momentum

Timely integration of ShareFile and Nuclea reduced execution risk and materially drove FY25 revenue. Coupled with multiple AI product launches, this broadens the product portfolio, improves cross-sell potential, and strengthens competitive positioning over the medium term.

Negative Factors

Elevated leverage from acquisition financing

High absolute debt and ~3.4x leverage constrain strategic flexibility and increase refinancing and interest-rate exposure. Even with a $250M repayment plan, meaningful leverage remains a balance-sheet risk that can limit M&A optionality and heighten sensitivity to cash-flow swings.

Modest organic ARR growth

Very low organic ARR growth (~2% pro forma) despite AI investments signals limited underlying subscription expansion and reliance on acquisitions for topline gains. This structural weakness could cap long-term revenue momentum and returns unless monetization or retention materially improves.

Rising cost base and working-capital pressure

A materially higher expense base (up 30% YoY) from acquisition-related costs and product investments, plus DSO rising to 73 days, pressures margin sustainability and cash flow. If synergies and collections lag, elevated OPEX and slower collections could erode free cash generation.

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 through multiple streams, primarily from software licensing, subscription services, and professional services. The company's key revenue streams include the sale of licenses for its development tools and platforms, ongoing subscriptions for cloud-based services, and support and maintenance contracts. Additionally, Progress earns income from consulting services that assist clients in implementing and optimizing their software solutions. Strategic partnerships with other technology firms enhance its offerings and broaden its market reach, contributing to its overall financial performance. The shift towards cloud computing and digital transformation also positions Progress to capitalize on the growing demand for modern application development and data management solutions.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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: 40.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 40.73 is below the 20-day moving average (MA) of 41.53, below the 50-day MA of 42.32, and below the 200-day MA of 48.62, indicating a bearish trend. The MACD of -0.50 indicates Positive momentum. The RSI at 45.94 is Neutral, neither overbought nor oversold. The STOCH value of 27.39 is Neutral, 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
CXM	77 Outperform	$1.49B	14.33	21.35%	―	6.48%	168.94%
PRGS	67 Neutral	$1.72B	24.42	15.95%	―	31.41%	-40.89%
DBD	64 Neutral	$2.48B	50.67	4.66%	―	-2.86%	985.78%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RNG	55 Neutral	$2.26B	186.78	―	―	5.45%	―
AMPL	52 Neutral	$1.06B	-9.95	-37.47%	―	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.