What Is Progress Software Corporation’s (PRGS) Share Price Doing?
Progress Software Corporation (NASDAQ:PRGS), a software company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NasdaqGS. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at PRGS’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for Progress Software
Is PRGS still cheap?
PRGS appears to be overvalued by 33% at the moment, based on my discounted cash flow valuation. The stock is currently priced at $41.91 on the market compared to my intrinsic value of $31.63. This means that the opportunity to buy PRGS at a good price has disappeared! Another thing to keep in mind is that PRGS’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of PRGS look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at PRGS future expectations. Though in the case of PRGS, it is expected to deliver a relatively unexciting top-line growth of 2.26% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for PRGS, at least in the near term.
What this means for you:
Are you a shareholder? PRGS’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe PRGS should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on PRGS for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for PRGS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Progress Software. You can find everything you need to know about PRGS in the latest infographic research report. If you are no longer interested in Progress Software, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
