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Roper (ROP) to Report Q1 Earnings: What's in the Cards?

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Roper Technologies, Inc. ROP is scheduled to report first-quarter 2021 results on Apr 27, before market open.

The company’s earnings beat expectations in each of the trailing four quarters, the positive surprise being 6.1%, on average. In the last reported quarter, earnings of $3.56 per share surpassed the Zacks Consensus Estimate of $3.49 by 2.01%.

In the past three months, the company’s shares have gained 2.8% compared with the industry’s growth of 95%.

Key Factors

Roper is anticipated to have benefited from strength across the network software and medical products businesses in the first quarter. Supported by accretive customer base, solid momentum across DAT and ConstructConnect businesses along with augmented networks might have enhanced Network Software & Systems segment’s revenues. However, it is likely to have witnessed year-over-year decline in organic sales. The Zacks Consensus Estimate for first-quarter revenues for the Network Software & Systems segment is pegged at $435 million, indicating a 2.9% decline from the previous quarter’s reported number.

Also, continued strength in the company’s laboratory software business, including Sunquest, Data Innovations and Clinisys, is likely to have boosted Roper’s Application Software segment revenues in to-be-reported quarter. Further, strong operational execution and organic sales, along with growth in both recurring and perpetual licenses revenues, might have driven the segment’s margin. The consensus mark for first-quarter revenues from Application Software is pegged at $571 million, suggesting 4% growth on a sequential basis.

Moreover, robust demand for the medical products at its Verathon business, along with recovery in Neptune and short cycle industrial businesses, is likely to have aided Measurement & Analytical Solutions segment amid the COVID-19 crisis. The consensus mark for the segment’s revenues stands at $375 million, suggesting a 0.5% increase on a sequential basis.

However, Roper’s Process Technologies segment is likely to have witnessed lower organic revenues, owing to persistent weakness in upstream oil and gas end markets. This might have adversely impacted its top-line performance. The consensus estimate for Process Technologies revenues stands at $129 million, implying a 5.1% decline on a sequential basis.

Apart from the above-mentioned factors, Roper’s operational flexibility, strength in segmental businesses and high-quality software acquisitions on the back of a disciplined capital deployment strategy are expected to have aided the company’s top-line growth in the quarter.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

But that is not the case here as we will see below.

Earnings ESP: Roper has an Earnings ESP of 0.00%, as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $3.32.

Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. Price and EPS Surprise
Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. price-eps-surprise | Roper Technologies, Inc. Quote

Zacks Rank: The company carries a Zacks Rank #3.

Key Picks

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Caterpillar Inc. CAT has an Earnings ESP of +3.15% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO Corporation AGCO has an Earnings ESP of +2.94% and a Zacks Rank of 3, at present.

Eaton Corporation, plc ETN has an Earnings ESP of +1.96% and a Zacks Rank of 3.

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