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

Zacks Equity Research

Roper Technologies, Inc. ROP is slated to report first-quarter 2019 results on Apr 25, before market open.

The company pulled off average positive earnings surprise of 4.96% in the preceding four quarters, beating estimates in each. Notably, Roper’s fourth-quarter adjusted earnings of $3.22 per share outpaced the Zacks Consensus Estimate of $3.13 by 2.88%.

In the past three months, the company’s shares have gained 27% compared with 20.2% growth recorded by the industry it belongs to.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Roper’s unique asset-light business model and its strategy to expand business across niche markets will boost first-quarter revenues and profitability, and generate strong cash flow. In addition, its innovative product pipeline is expected to be a major growth driver.

Also, the company has successfully maintained a dominant position in most of the markets wherein it operates. Its diversified revenue stream also allows it to counter headwinds stemming from a cyclical business environment. Notably, robust growth across its niche medical product businesses, stronger sales from software assets, strong order trends across industrial business are likely to be tailwinds in the quarter under review. Moreover, strength in Deltek Software, GovCon and Freight Matching businesses are likely to drive near-term revenues of the company.

Amid this backdrop, the Zacks Consensus Estimate for first-quarter revenues of Roper's Industrial Technology and Medical & Scientific Imagingsegments is pegged at $218 million and $376 million, respectively, higher than $216 million and $366 million recorded in the prior-year quarter. The consensus estimate for revenues of Energy Systems & Controls segment currently stands at $134 million compared with $139 million recorded a year ago.

Moreover, the company expects stronger revenues and greater operational efficiency to boost its profitability. However, escalating material costs remain a concern. Notably, it anticipates to generate earnings of $2.74-$2.80 per share in the first quarter.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) for a likely earnings beat.

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

That is not the case here as we will see below.

Earnings ESPRoper has an Earnings ESP of 0.00%, as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.79.

Roper Technologies, Inc. Price and EPS Surprise


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

Zacks Rank: The company carries a Zacks Rank #1, which when combined with ESP of 0.00% makes surprise prediction difficult.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Key Picks

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

Axon Enterprise, Inc AAXN has an Earnings ESP of +6.99% and a Zacks Rank #3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Sun Hydraulics Corporation SNHY has an Earnings ESP of +1.05% and a Zacks Rank #1.

Regal Beloit Corporation RBC has an Earnings ESP of +2.13% and a Zacks Rank #3.

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