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Progress Software Corp. (PRGS)
NASDAQ:PRGS
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Progress Software (PRGS) AI Stock Analysis

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PRGS

Progress Software

(NASDAQ:PRGS)

Rating:69Neutral
Price Target:
$52.00
▲(12.95%Upside)
Progress Software scores well on financial performance and earnings call analysis, showcasing strong growth and strategic initiatives. However, technical indicators highlight bearish momentum, and the high P/E ratio indicates overvaluation concerns. The company's high leverage is a risk factor, although mitigated by solid operational performance.

Progress Software (PRGS) vs. SPDR S&P 500 ETF (SPY)

Progress Software Business Overview & Revenue Model

Company DescriptionProgress 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 MoneyProgress 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 Earnings Call Summary

Earnings Call Date:Jun 30, 2025
(Q2-2025)
|
% Change Since: -27.88%|
Next Earnings Date:Sep 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance for Progress Software with significant revenue and ARR growth, successful integration of ShareFile, and strategic acquisition of Nuclia to enhance AI capabilities. Despite a minor setback in free cash flow, the company's overall financial health and outlook remain robust.
Q2-2025 Updates
Positive Updates
Strong Revenue and ARR Growth
Total revenue for the second quarter was $237 million, up 36% over last year. Annual Recurring Revenue (ARR) grew 46% year-over-year to $838 million, with net retention at 100%.
Successful ShareFile Integration
ShareFile integration is ahead of schedule, with most operational synergies completed. ShareFile contributed to strong renewals and expansions, and has been integrated with Microsoft 365, enhancing productivity.
Improved Operating Margin and Earnings
Operating margin was 40%, with earnings per share exceeding guidance at $1.40. Strong cost management and solid top line performance were key drivers.
Nuclia Acquisition
Acquired Nuclia for $20 million to enhance AI capabilities. This acquisition is expected to integrate AI features across Progress's product portfolio.
Increased Full Year Guidance
Full year 2025 revenue guidance increased by $4 million to $962-$974 million. Earnings per share guidance increased to $5.28-$5.40.
Negative Updates
Free Cash Flow Below Expectations
Free cash flow was below expectations due to timing on collections and the transition of ShareFile to Progress's billing system.
Company Guidance
During Progress Software's Second Quarter 2025 Earnings Call, the company reported a total revenue of $237 million, marking a 36% increase from the previous year. The annual recurring revenue (ARR) grew by 46% year-over-year, reaching $838 million, with a net retention rate of 100%. The operating margin was reported at 40%, and earnings per share exceeded expectations, highlighting effective cost management. Additionally, the company paid down $40 million on its revolving credit line, contributing to an improved balance sheet. Looking ahead, Progress Software raised its guidance for the remainder of the fiscal year, anticipating continued business strength and solid expense control.

Progress Software Financial Statement Overview

Summary
Progress Software demonstrates strong revenue growth and efficient cash flow management, though high leverage is a potential risk. The company shows strong operational performance and cash generation capabilities.
Income Statement
85
Very Positive
Progress Software has demonstrated strong revenue growth over the years, with an impressive increase from $442 million in 2020 to $869 million in TTM (Trailing-Twelve-Months). Gross profit margins are robust, consistently above 80%, indicating effective cost management. However, the net profit margin has shown some variability, reflecting fluctuations in net income. The EBIT and EBITDA margins are healthy, indicating strong operational efficiency.
Balance Sheet
75
Positive
The balance sheet reflects a high debt-to-equity ratio, which is a potential risk factor, as the company has significantly increased its leverage over the years. Despite this, the return on equity (ROE) remains positive, demonstrating effective use of equity to generate profits. The equity ratio is stable, although relatively low, suggesting that liabilities make up a significant portion of the company's financing structure.
Cash Flow
80
Positive
Operating cash flow has been consistently strong, exceeding net income, which is a positive indicator of cash generation efficiency. The free cash flow growth rate is positive, though it has seen some fluctuations. The free cash flow to net income ratio remains healthy, highlighting the company's ability to generate cash from operations.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue869.02M753.41M694.44M602.01M531.31M442.15M
Gross Profit709.90M622.93M567.86M507.52M452.86M380.04M
EBITDA260.18M124.00M213.38M214.77M178.93M149.50M
Net Income57.59M68.44M70.20M95.07M78.42M79.72M
Balance Sheet
Total Assets2.41B2.53B1.60B1.41B1.36B1.04B
Cash, Cash Equivalents and Short-Term Investments102.01M118.08M126.96M251.76M157.37M106.00M
Total Debt1.49B1.56B747.11M640.59M591.35M416.48M
Total Liabilities1.96B2.09B1.14B1.01B951.05M695.77M
Stockholders Equity452.70M438.79M459.71M393.99M412.49M346.01M
Cash Flow
Free Cash Flow170.53M206.29M168.35M186.07M173.88M138.33M
Operating Cash Flow176.25M211.49M173.92M192.16M178.53M144.85M
Investing Cash Flow-859.62M-857.91M-360.38M-6.09M-258.62M-218.69M
Financing Cash Flow590.52M640.82M51.19M-91.68M131.46M6.15M

Progress Software Technical Analysis

Technical Analysis Sentiment
Negative
Last Price46.04
Price Trends
50DMA
56.98
Negative
100DMA
57.36
Negative
200DMA
60.19
Negative
Market Momentum
MACD
-2.54
Negative
RSI
27.17
Positive
STOCH
20.85
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 46.04 is below the 20-day moving average (MA) of 49.32, below the 50-day MA of 56.98, and below the 200-day MA of 60.19, indicating a bearish trend. The MACD of -2.54 indicates Negative momentum. The RSI at 27.17 is Positive, neither overbought nor oversold. The STOCH value of 20.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRGS.

Progress Software Risk Analysis

Progress Software disclosed 37 risk factors in its most recent earnings report. Progress Software reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Progress Software Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$2.33B21.9617.50%6.75%97.06%
71
Outperform
$1.78B598.860.49%23.31%
69
Neutral
$2.07B36.8113.48%1.46%22.10%-20.37%
63
Neutral
$1.60B-32.87%8.56%-4.21%
62
Neutral
$35.05B6.90-11.57%2.06%6.28%-15.90%
51
Neutral
$2.29B16.58%7.78%70.43%
48
Neutral
$2.13B0.78-1.02%-2.66%-100.56%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRGS
Progress Software
46.04
-9.14
-16.56%
RNG
RingCentral
23.63
-11.24
-32.23%
OLO
Olo
10.39
5.37
106.97%
CXM
Sprinklr
8.58
-0.28
-3.16%
AMPL
Amplitude
11.55
3.83
49.61%
DBD
Diebold Nixdorf
56.29
20.58
57.63%

Progress Software Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Progress Software Secures New Credit Facility Agreement
Positive
Jul 22, 2025

On July 22, 2025, Progress Software announced a new credit facility agreement, increasing its revolving credit from $900 million to $1.5 billion and extending the maturity date to July 31, 2030. This move is expected to support the company’s growth strategy and enhance its ability to pursue additional acquisitions, positioning Progress well for future expansion.

The most recent analyst rating on (PRGS) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on Progress Software stock, see the PRGS Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Progress Software Reports Strong Q2 2025 Financial Results
Positive
Jun 30, 2025

Progress Software announced its financial results for the second quarter of 2025, reporting a 36% year-over-year increase in revenue to $237 million and a 46% increase in annualized recurring revenue to $838 million. The company also raised its full-year guidance for revenue, operating margin, earnings per share, and cash flow, reflecting strong performance across all geographies and successful integration of ShareFile. Additionally, Progress acquired Nuclia, an innovator in agentic Retrieval-Augmented Generation AI solutions, to enhance its Data Platform and expand market reach.

The most recent analyst rating on (PRGS) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on Progress Software stock, see the PRGS Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Progress Software Holds Annual Stockholders Meeting on May 8
Neutral
May 9, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 22, 2025