Roper Technologies, Inc. (NYSE:ROP) just released its quarterly report and things are looking bullish. The company beat expectations with revenues of US$1.3b arriving 3.6% ahead of forecasts. Statutory earnings per share (EPS) were US$2.08, 8.3% ahead of estimates. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Roper Technologies
Taking into account the latest results, Roper Technologies’ nine analysts currently expect revenues in 2020 to be US$5.44b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dive 40% to US$9.18 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$5.39b and earnings per share (EPS) of US$9.27 in 2020. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
The consensus price target rose 8.1% to US$423despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Roper Technologies’ earnings by assigning a price premium. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Roper Technologies at US$490 per share, while the most bearish prices it at US$304. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Roper Technologies shareholders.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It’s pretty clear that there is an expectation that Roper Technologies’ revenue growth will slow down substantially, with revenues next year expected to grow 0.6%, compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.1% next year. Factoring in the forecast slowdown in growth, it seems obvious that Roper Technologies is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn’t be too quick to come to a conclusion on Roper Technologies. Long-term earnings power is much more important than next year’s profits. We have forecasts for Roper Technologies going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example – Roper Technologies has 4 warning signs we think you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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