Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.7 |
| P/S | 7.2 |
| EV/EBITDA | 3.1 |
| Fwd P/E | 7.9 |
| PEG | 5.2 |
| Analyst target | 6.0 |
- ▸Forward P/E: 15.3x
- ▸PEG: 1.45
ROP · Why this verdict
Why Roper Technologies (ROP) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Roper has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 1.55%, reflecting the company's highly predictable subscription software revenue model that enables consistent delivery against consensus expectations. Earnings | The beat streak extends to six or more consecutive quarters as recurring software revenue mix continues to grow and management's guidance discipline produces a reliable beat-and-raise pattern. | →Stable |
| CounterA 1.55% average earnings beat is a narrow margin that represents conservatively set expectations rather than meaningful outperformance; a single quarter of cost pressure or revenue timing shift could convert this to a miss. | ||
Free cash flow of 127% of net income and net margins of 21% demonstrate that Roper's acquisition-driven portfolio of vertical software businesses generates significant cash above and beyond GAAP earnings, reflecting low capital intensity and high customer retention in niche markets. Quality breakdown | Free cash flow per share exceeds $18 over the next four quarters as margin expansion in recently acquired software businesses compounds without proportional capital reinvestment requirements. | →Stable |
| CounterA portfolio of acquired vertical software businesses carries integration risk, and the 127% free-cash-flow-to-net-income conversion may obscure deferred maintenance capital that will eventually be required to keep aging software products competitive. | ||
Roper relies on sole-source suppliers for certain hardware components in its industrial measurement and monitoring products, creating a supply chain concentration that could delay product delivery or increase input costs if any sole supplier experiences production issues. Bear case | Roper qualifies alternative suppliers for its highest-risk single-source components within 12 months as part of supply chain resilience investments, reducing this risk from high to medium priority. | →Stable |
| CounterFor a company whose revenues are increasingly software-driven — with software representing a growing share of total revenues — hardware supply chain risks are diminishing in materiality relative to the overall business. | ||
Despite the stock sitting near its 52-week low with the 200-day moving average declining at -7.0% per month, analyst consensus sees 21% upside to the $402 target — a divergence between technical damage and fundamental valuation that creates an opportunity for investors with a 12-to-18 month horizon. Targets | Price recovers above $380, closing more than half the gap to the $402 analyst target, within 12 months as earnings beat momentum attracts buyers at depressed prices. | →Stable |
| CounterDeath crosses in high-quality compounder stocks can persist when driven by rotation from expensive software multiples into value or cyclical sectors; the 21% upside may remain on paper for longer than a 12-month horizon allows. | ||
Roper has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 1.55%, reflecting the company's highly predictable subscription software revenue model that enables consistent delivery against consensus expectations.
→StableEarnings
- Expectation
- The beat streak extends to six or more consecutive quarters as recurring software revenue mix continues to grow and management's guidance discipline produces a reliable beat-and-raise pattern.
CounterA 1.55% average earnings beat is a narrow margin that represents conservatively set expectations rather than meaningful outperformance; a single quarter of cost pressure or revenue timing shift could convert this to a miss.
Free cash flow of 127% of net income and net margins of 21% demonstrate that Roper's acquisition-driven portfolio of vertical software businesses generates significant cash above and beyond GAAP earnings, reflecting low capital intensity and high customer retention in niche markets.
→StableQuality breakdown
- Expectation
- Free cash flow per share exceeds $18 over the next four quarters as margin expansion in recently acquired software businesses compounds without proportional capital reinvestment requirements.
CounterA portfolio of acquired vertical software businesses carries integration risk, and the 127% free-cash-flow-to-net-income conversion may obscure deferred maintenance capital that will eventually be required to keep aging software products competitive.
Roper relies on sole-source suppliers for certain hardware components in its industrial measurement and monitoring products, creating a supply chain concentration that could delay product delivery or increase input costs if any sole supplier experiences production issues.
→StableBear case
- Expectation
- Roper qualifies alternative suppliers for its highest-risk single-source components within 12 months as part of supply chain resilience investments, reducing this risk from high to medium priority.
CounterFor a company whose revenues are increasingly software-driven — with software representing a growing share of total revenues — hardware supply chain risks are diminishing in materiality relative to the overall business.
Despite the stock sitting near its 52-week low with the 200-day moving average declining at -7.0% per month, analyst consensus sees 21% upside to the $402 target — a divergence between technical damage and fundamental valuation that creates an opportunity for investors with a 12-to-18 month horizon.
→StableTargets
- Expectation
- Price recovers above $380, closing more than half the gap to the $402 analyst target, within 12 months as earnings beat momentum attracts buyers at depressed prices.
CounterDeath crosses in high-quality compounder stocks can persist when driven by rotation from expensive software multiples into value or cyclical sectors; the 21% upside may remain on paper for longer than a 12-month horizon allows.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Roper Technologies is a software-driven industrial holding company with a perfect four-quarter earnings beat streak, 127% free-cash-flow-to-net-income conversion, and 21% analyst upside, currently in a technical downtrend from a death cross that may offer a patient accumulation window for investors in a proven compounder.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.0 |
| ROA | 2.9 |
| Gross margin | 9.9 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.1 |
| FCF quality | 9.2 |
| Moat | 7.1 |
| Rule of 40 | 5.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 21%
- ▸Excellent cash conversion: 127% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
7.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.3 |
| EPS growth | 10.0 |
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.6 |
- ▸Overbought bear rally (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.7%/30d — confirmed downtrend
Sentiment
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 8.1 |
| erm sentiment | 4.8 |
- ▸Analyst upside: 24%
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 6.5 |
| growth rank | 3.7 |
- ▸Best-in-class margins
Technical
1.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.5 |
| 52w position | 2.7 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 5.9 |
| volatility | 5.6 |
| put call | 9.5 |
| implied vol | 4.8 |
| beta | 8.4 |
| debt equity | 7.7 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.3 |
| dividend safety | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 100.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:20d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.0<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.96
Upside
+11.6%
Downside
12.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 73
EdgeCatalyst-Driven — Earnings in 20d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.1>=5.5. Top dim: Growth at 7.7; weakest: Technical at 1.1. No conviction either direction.
The strongest dimensions are Growth at 7.7, Risk (lower is worse) at 7.0, and Quality at 6.9; the weakest are Technical at 1.1, Peer rank at 3.7, and Insider at 5.1. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.96 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak Software
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, ending the sustained beat pattern and signaling the revenue model is less predictable than the track record implies.
- P2Superior Free Cash Flow Conversion
Trip ifFree cash flow conversion falls below 90% of net income for 2 consecutive quarters, indicating cash generation quality is declining as deferred costs come due.
- P321 Pct Analyst Upside Death Cross
Trip ifPrice drops below $295, more than 11% below the current $332.45, confirming the downtrend is accelerating rather than approaching a bottom.
- P4Sole Source Supplier Supply Chain
Trip ifAny supply disruption results in a product delivery delay affecting more than 10% of quarterly hardware revenue, demonstrating that sole-source dependency has materially impacted results.