Progress software‘s PRGS stock has risen 37.4% over the past six months, outperforming the Zacks Computer & Technology industry’s valuation of 4.7% and the Zacks Computer-Software industry’s growth rate of 3. 5%.
PRGS shares have outperformed peers, including ANSYS ANSWER, Cadence Design Systems CDNS and Microsoft MSFT, in the same time frame.
Shares of ANSYS have lost 2.5%, while shares of Microsoft and Cadence Design Systems have lost 1.9% and 5.4%, respectively.
PRGS shares are benefiting from growing demand for its AI-powered infrastructure software solutions and a strong focus on high-quality recurring revenue streams, which contribute to stable financial performance.
Progress Software Corporation price consensus chart | Quote from Progress Software Corporation
However, marginal revenue growth of $179 million, up just 2% year-over-year, and a relatively flat Annual Recurring Revenue (ARR) of $582 million highlight areas of concern for the company.
The company has a strong data platform with MarkLogic, Semaphore and OpenEdge, providing data management, analytics and app solutions that support long-term growth across all industries.
PRGS’ growth is driven by key products across its portfolio, including DevTools, Sitefinity, LoadMaster, Flowmon, Telerik and MOVEit, each of which has seen greater adoption, contributing to its strong performance.
The company recently launched the Q4 2024 release for Telerik and Kendo UI, introducing advanced design-to-code tools and support for .NET 9 and Angular 19.
Progress Software recently acquired ShareFile, a SaaS-native, AI-powered content collaboration and workflow automation platform, making document sharing more efficient.
The company posted revenue of $179 million, beating the upper end of its expectations of $174-$178 million. Earnings per share (EPS) were $1.26, exceeding the range of $1.11-$1.15.
Non-GAAP operating margin of 41%, up 200 basis points year-over-year, indicates strong financial health. This improvement reflects solid revenue growth and the company’s continued focus on cost control and efficient operations.
The reduction in Progress Software’s outstanding days from 49 days to 45 days indicates improved efficiency of the collection process. This decline reflects better cash flow management and strengthened operational health.
Net customer retention in the third quarter was 99%, demonstrating the company’s strength in retaining customers and delivering stable value, ensuring business stability and growth.
For the fourth quarter of 2024, Progress Software expects non-GAAP revenues between $207 million and $217 million.
The Zacks Consensus Estimate for fourth-quarter 2024 revenue is pegged at $211.34 million, indicating year-over-year growth of 19.05%.
Progress Software expects non-GAAP earnings to be between $1.15 and $1.25 per share.
The consensus earnings figure is set at $1.21 per share, indicating growth of 18.63% over the figure reported in the previous year’s quarter.
For 2024, non-GAAP revenues are projected between $745 million and $755 million.
The Zacks Consensus Estimate for revenue is pegged at $749.79 million, indicating year-over-year growth of 7.40%.
PRGS expects non-GAAP earnings between $4.75 and $4.85 per share.
The consensus earnings estimate is set at $4.81 per share, indicating year-over-year growth of 10.57%.
PRGS currently carries a Zacks Rank #3 (Hold), indicating that waiting for a more favorable entry point into the stock may be wise.
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