Can Application Software Strength Lift Roper (ROP) Q3 Earnings?
Roper Technologies ROP is scheduled to release third-quarter 2023 results on Oct 25, before market open.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 3.7%.
Let’s see how things have shaped up for Roper this earnings season.
Roper Technologies, Inc. Price and EPS Surprise
Roper Technologies, Inc. price-eps-surprise | Roper Technologies, Inc. Quote
Factors to Note
Roper is benefiting from strength across the Application Software segment due to solid growth in the Deltek, Vertafore and Aderant businesses. We expect the company’s Application Software revenues to increase 20% year over year for the third quarter.
Strong retention and customer expansion activity and strength across the Foundry business have been fostering growth of the Network Software segment. Our estimate for Network Software segment revenues in the third quarter indicates a year-over-year increase of 8.1%.
The Tech-enabled Products segment is expected to generate higher revenues on the back of improving supply chains and increased demand for residential and commercial ultrasonic or static meters. We expect the Tech-enabled Products segment revenues to climb 7.4% year over year for the third quarter.
Contributions from the acquisition of Syntellis Performance Solutions (August 2023) and Frontline Education are expected to boost Roper’s top-line results in the to-be-reported quarter. Our estimate for the company’s total revenues in the third quarter suggests a 13.6% increase from the year-ago reported figure.
However, the escalating cost of sales due to raw material cost inflation and higher selling, general and administrative expenses may partly affect ROP’s bottom-line performance.
Earnings Whispers
Our proven model suggests an earnings beat for Roper this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Roper has an Earnings ESP of +0.36% as the Most Accurate Estimate is pegged at $4.22, higher than the Zacks Consensus Estimate of $4.21. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Roper presently carries a Zacks Rank of 2.
Highlights of Q2 Earnings
Roper’s second-quarter 2023 adjusted earnings of $4.12 per share surpassed the Zacks Consensus Estimate of $4 per share. On a year-over-year basis, earnings increased 4.3%. The company’s net revenues of $1,531.2 million beat the consensus estimate of $1,495.4 million. The top line increased 16.8% year over year.
Other Stocks to Consider
Here are some other companies that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Stanley Black & Decker SWK has an Earnings ESP of +3.20% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Oct 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stanley Black pulled off a trailing four-quarter earnings surprise of 47.2%, on average. The stock has gained 7.6% in a year.
Tenaris TS has an Earnings ESP of +2.89% and a Zacks Rank #3. The company is slated to release third-quarter results on Nov 1.
Tenaris delivered a trailing four-quarter earnings surprise of 7.7%, on average. The stock has rallied 17.1% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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