Roper (ROP) to Report Q4 Earnings: What's in the Cards?
Roper Technologies ROP is scheduled to release fourth-quarter 2023 results on Jan 31, before market open.
The Zacks Consensus Estimate for Roper’s fourth-quarter earnings increased 0.5% in the past 60 days. 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 2.7%.
The Zacks Consensus Estimate for the company’s fourth-quarter 2023 revenues is pegged at $1,575 million, suggesting growth of 10.1% from the prior-year quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at $4.33 per share, indicating 10.5% growth from the year-ago quarter’s reported number.
Let’s see how things have shaped up for Roper this earnings season.
Factors to Note
ROP’s Application Software segment’s fourth quarter 2023 performance is expected to have benefited from solid growth in the Deltek business, driven by continued software as a service (“SaaS”) strength, sustained momentum in the small and medium-sized business channel and private sector solutions and strong momentum in the Vertafore business, driven by growing adoption and cross-selling of SaaS solutions and continued Generative AI innovations.
The MGA system’s acquisition and strength across core P&C business within the Vertafore business and solid demand for decision support and financial planning solutions within the Strata business are expected to have aided the Application Software segment. We anticipate the segment’s revenues to increase 10.2% year over year to $815.6 million in the fourth quarter.
Strong momentum in the DAT & Loadlink businesses, excellent bookings in the iPipeline business, strength across the Foundry business and solid alternate site healthcare businesses (MHA, SHP & SoftWriters) are likely to have boosted the performance of the Network Software segment. Our estimate for the Network Software segment’s revenues in the fourth quarter is pegged at $366.1 million, indicating a year-over-year increase of 4.6%.
The Tech-enabled Products segment is expected to generate higher revenues in the to-be-reported quarter on the back of the solid performance of the Neptune business, driven by continued demand for ultrasonic meters and increasing adoption of meter data management software. We expect the Tech-enabled Products segment’s revenues to increase 11.9% to $381.5 million from the year-ago reported figure.
Acquisitions made by the company are likely to have aided its top line in fourth-quarter 2023. Roper acquired Syntellis Performance Solutions in August 2023, which boosted its Strata Decision Technology business. Also, the buyout of Frontline Education in October 2022 expanded ROP’s presence in the K-12 education market. Our estimate for the company’s total revenues in the fourth quarter is pegged at $1,563.2 million, suggesting a 9.2% 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 are likely to have affected the company’s results in the fourth quarter. Also, given Roper’s substantial international presence, adverse foreign currency movements are likely to have impeded its performance in the to-be-reported quarter.
Roper Technologies, Inc. Price and Consensus
Roper Technologies, Inc. price-consensus-chart | Roper Technologies, Inc. Quote
Earnings Whispers
Our proven model predicts 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: ROP has an Earnings ESP of +1.69% as the Most Accurate Estimate is pegged at $4.40, which is higher than the Zacks Consensus Estimate of $4.33 per share. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #2.
Highlights of Q3 Earnings
Roper’s third-quarter 2023 adjusted earnings of $4.32 per share surpassed the Zacks Consensus Estimate of adjusted earnings of $4.21 per share. On a year-over-year basis, earnings increased 17.7%. Its net revenues of $1,563.4 million beat the consensus estimate of $1,539 million. The top line increased 15.8% year over year. Organic sales in the quarter increased 6%, owing to strength across each of the three segments. Acquisitions boosted sales by 9%.
Other Stocks to Consider
Here are some other companies within the broader Computer and Technology sector that, according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Apple Inc. AAPL has an Earnings ESP of +1.96% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release first-quarter fiscal 2024 (ended December 2023) results on Feb 1. Apple’s earnings surpassed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one, the average beat being 3.5%.
Akamai Technologies, Inc. AKAM has an Earnings ESP of +1.61% and a Zacks Rank #3. The company is slated to release fourth-quarter 2023 results on Feb 13.
Akamai’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 6.9%.
Allegro MicroSystems, Inc. ALGM has an Earnings ESP of +1.16% and a Zacks Rank of 3. The company is slated to release third-quarter fiscal 2024 (ended December 2023) results on Feb 1.
Allegro’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6.4%.
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