PRGS: AI Demand And Domo Acquisition Will Support Future Returns

Analysts lifted their price target on Progress Software to $45 from $40, citing updated models that factor in the planned Domo asset acquisition, modestly higher projected revenue growth, and a higher assumed future P/E multiple.

Analyst Commentary

Recent research on Progress Software gives you a mixed picture, with some analysts pointing to constructive factors around the Domo asset purchase and others flagging valuation and execution risks. The differing views can help you frame where expectations for Progress Software may be stretched and where there could be room for disappointment if things do not go as planned.

On the supportive side, one firm lifted its price target on Progress Software to $45 from $40 after incorporating the planned acquisition of Domo's assets and liabilities for about $355M. That higher target reflects updated revenue assumptions related to the deal and a higher assumed future P/E multiple, alongside confidence in management's ability to handle what are described as headwinds at Domo.

Another firm kept an Outperform rating on Progress Software while trimming its price target to $50 from $57 following what it described as a solid Q2, with revenue and earnings ahead of expectations. That research cited top line strength, some large deal pull forward, and expense discipline as supports for the investment case, even as the target was adjusted lower.

Outside Progress Software itself, reactions to Domo around the transaction have been split. One research house upgraded Domo to Buy from Hold, even while bringing its price target down to $5 from $7, pointing to the pending US$400M asset sale to Progress Software, expected net cash of US$246M at close, and more than US$900M of NOL carryforwards as key factors in its view of upside relative to the prior day’s closing price.

Another firm took a more muted stance on Domo, moving the stock to Equal Weight from Overweight and trimming its target to $4 from $5 after the sale agreement with Progress Software. That report suggested investors consider taking some profits even at what was described as a meaningful discount to cash, highlighting how caution can persist even when there is substantial balance sheet support.

For you as an investor looking at Progress Software, this mix of higher and lower price targets and differing takes on Domo underlines that the market is still sorting through what the acquisition means for growth, profitability and valuation over time.

Bearish Takeaways

• Bearish analysts cutting Domo's rating from an overweight stance to a more neutral view, while also trimming the price target to $4 from $5 after the Progress Software deal, signal concern that upside could be more limited, even with the agreed asset sale in place.
• The decision by bearish analysts to lower a Progress Software price target to $50 from $57, despite describing Q2 revenue and earnings as ahead of expectations, points to worries that current valuation may already reflect a lot of good news and that future growth could be harder to sustain.
• Cautious commentary around taking profits in Domo, even at a meaningful discount to cash, suggests some bearish analysts are focusing on execution risks tied to the asset transfer to Progress Software and potential integration challenges that could weigh on near term results.
• The mix of target cuts for both Progress Software and Domo, alongside only modest target increases elsewhere, highlights an undercurrent of concern that growth expectations and P/E assumptions might prove demanding if the Domo assets do not contribute as smoothly or as quickly as hoped.

What’s in the News for Progress Software

• Progress Software reported fiscal Q2 2026 non GAAP EPS of $1.62 versus analyst estimates of $1.49 to $1.52 and revenue of $253.5 million compared with a $242.7 million consensus, with management linking the results to demand for its AI powered products, including offerings for NVIDIA's DGX Spark platform. (Source: company results coverage)
• Following Q2 2026, Progress Software raised its full year 2026 guidance to adjusted EPS of $6.09 to $6.21 and revenue of $990 million to $1.02b, and highlighted capital allocation priorities that include focused M&A and debt reduction toward a net leverage ratio around 2.8x. (Source: company guidance commentary)
• Progress Software expanded its Chef platform with Progress Chef Enterprise Management for NVIDIA DGX Spark, providing lifecycle management, configuration, and compliance tools for desktop AI supercomputers, with pricing set at US$189 per year per system. (Source: client announcement)
• Recent coverage indicated that Progress Software's Q2 outcome and AI product momentum drew positive analyst commentary, with at least one firm reaffirming an Outperform rating while making a modest reduction to its target price. (Source: analyst reaction reports)
• From March 1, 2026 to June 30, 2026, Progress Software repurchased 1,225,254 shares for US$34.66 million under its ongoing program, reaching a cumulative 14,509,584 shares repurchased for US$635.71 million since the buyback was announced on March 30, 2016. (Source: buyback tranche update)

Valuation Changes for Progress Software

• Fair Value: updated assessment has risen from $40.00 to $45.00, a change of about 12.5%.
• Discount Rate: slightly reduced from 10.93% to 10.92%, implying a marginally lower required return in the model.
• Revenue Growth: projected rate increased from 32.59% to 33.86%, indicating a modestly higher growth assumption.
• Net Profit Margin: adjusted fractionally from 7.03% to 7.02%, essentially unchanged in the updated view.
• Future P/E: assumed forward P/E multiple has risen from 26.83x to 30.19x, reflecting a higher valuation multiple applied to Progress Software in the revised model.