Progress Software (PRGS) AI Stock Analysis

• Market Cap: $2.71B
• Dividend Yield: 1.11%
• Average Volume (3M): 393.62K
• Price to Earnings (P/E): 49.0
• Beta (1Y): 0.28
• Revenue Growth: 12.85%
• EPS Growth: -16.89%
• Country: US
• Employees: 2,815
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Application
• EPS (TTM): 1.31
• Shares Outstanding: 43,025,993
• 10 Day Avg. Volume: 364,846
• 30 Day Avg. Volume: 393,619
• PEG Ratio: 1.09
• Price to Book (P/B): 5.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.46
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 0.90
• Enterprise Value/Gross Profit: 4.18
• Enterprise Value/Ebitda: 2.87
• 1Y Price Target: $73.60
• Price Target Upside: 16.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 79 Outperform
• Price Target: $73.00 ▲(15.43%Upside)

Progress Software's strong financial performance and positive earnings call are the most significant factors driving the score. The technical indicators suggest potential overbought conditions, while the valuation indicates the stock is currently overvalued. The strategic initiatives and successful integrations provide a positive outlook, but investors should be cautious of high valuations.

Progress Software Business Overview & Revenue Model

Company Description

Progress Software Corporation, listed as PRGS, is a global software company that specializes in providing products to develop, deploy, and manage high-impact business applications. The company operates in the software and technology sector, offering a comprehensive suite of products that include application development, data connectivity and integration, and digital experience solutions. With a focus on helping businesses drive digital transformation, Progress Software serves a diverse range of industries, including financial services, healthcare, manufacturing, and telecommunications.

How the Company Makes Money

Progress Software generates revenue primarily through the sale of software licenses, maintenance and support services, and cloud-based subscription services. The company's key revenue streams include licensing fees for its development tools and platforms, which enable businesses to create custom applications tailored to their specific needs. Additionally, Progress Software offers subscription-based services for its cloud solutions, providing clients with scalable and flexible options for application deployment and management. The company also earns from providing technical support and consulting services, ensuring customers maximize the value of their investments in Progress Software's products. Significant partnerships with other technology firms and system integrators further enhance its revenue potential by expanding its market reach and integrating its solutions into broader technology ecosystems.

Progress Software Financial Statement Overview

Summary

Progress Software demonstrates strong financial performance with consistent revenue growth and robust operational efficiency, as evidenced by high gross profit margins and solid cash flow generation. The balance sheet is stable, though reliance on debt requires monitoring.

Income Statement

Progress Software demonstrates a strong financial performance with consistent revenue growth, as seen in the 7.07% increase from the prior year in the TTM period. The gross profit margin is robust at 80.15%, indicating effective cost management. However, the net profit margin has slightly decreased to 7.03%, suggesting increased expenses or other costs affecting net income. The EBIT margin of 15.57% and EBITDA margin of 25.09% show healthy operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.92, suggesting moderate leverage. The company's return on equity is 13.14%, indicating reasonable profitability relative to shareholder investments. The equity ratio stands at 17.54%, which implies a lower reliance on equity financing, hence a potential risk if debt levels rise.

Cash Flow

Cash flow analysis reveals a strong operational cash flow to net income ratio of 3.73, suggesting excellent cash generation from operations. The free cash flow to net income ratio is 3.62, reflecting efficient capital expenditure management. The free cash flow has slightly decreased by 0.49% year-over-year, which is manageable given the overall positive cash flow metrics.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
806.74M	753.41M	694.44M	602.01M	531.31M	442.15M
	Gross Profit
646.52M	622.93M	567.86M	507.52M	452.86M	380.04M
	EBIT
125.66M	124.00M	110.52M	132.13M	116.10M	107.73M
	EBITDA
239.96M	124.00M	213.38M	214.77M	178.93M	149.50M
	Net Income Common Stockholders
56.74M	68.44M	70.20M	95.07M	78.42M	79.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
124.16M	118.08M	126.96M	251.76M	157.37M	106.00M
	Total Assets
2.46B	2.53B	1.60B	1.41B	1.36B	1.04B
	Total Debt
1.53B	1.56B	747.11M	640.59M	591.35M	416.48M
	Net Debt
1.41B	1.44B	620.15M	384.31M	435.94M	318.49M
	Total Liabilities
2.03B	2.09B	1.14B	1.01B	951.05M	695.77M
	Stockholders Equity
431.85M	438.79M	459.71M	393.99M	412.49M	346.01M
Cash Flow		Free Cash Flow
205.28M	206.29M	168.35M	186.07M	173.88M	138.33M
	Operating Cash Flow
211.47M	211.49M	173.92M	192.16M	178.53M	144.85M
	Investing Cash Flow
-860.08M	-857.91M	-360.38M	-6.09M	-258.62M	-218.69M
	Financing Cash Flow
644.37M	640.82M	51.19M	-91.68M	131.46M	6.15M

Progress Software Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 63.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 63.24 is above the 20-day moving average (MA) of 62.56, above the 50-day MA of 60.20, and above the 200-day MA of 61.25, indicating a bullish trend. The MACD of 1.02 indicates Negative momentum. The RSI at 56.72 is Neutral, neither overbought nor oversold. The STOCH value of 83.58 is Negative, 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	79 Outperform	$2.71B	48.96	12.70%	1.11%	12.85%	-16.89%
TTMI	74 Outperform	$3.72B	48.64	5.02%	―	11.65%	―
DV	73 Outperform	$2.43B	50.30	4.83%	―	15.30%	-22.69%
TDC	67 Neutral	$2.12B	15.65	130.19%	―	-6.53%	240.56%
FORM	66 Neutral	$2.71B	49.65	5.74%	―	15.33%	-47.04%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
RNG	52 Neutral	$2.41B	―	16.58%	―	7.78%	70.43%

Progress Software Corporate Events

Progress Software Holds Annual Stockholders Meeting on May 8

On May 8, 2025, Progress Software Corporation held its annual meeting of stockholders where key decisions were made, including the election of nine board members, approval of executive compensation, and ratification of Deloitte & Touche LLP as the independent auditor for 2025. These decisions are crucial for the company’s governance and operational strategy, potentially impacting its market position and stakeholder confidence.

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.