PRGS: AI And Buybacks Will Support A More Constructive Forward Outlook

Analysts have adjusted their view on Progress Software, with the latest research indicating a modest change in the price target in dollar terms as they refine assumptions around the discount rate, revenue growth, profit margins, and future P/E expectations.

Analyst Commentary

Recent research on Progress Software has included both upward and downward price target revisions, which signals that opinion is mixed and that the risk and reward trade off is being reassessed.

Some of the more cautious price target changes highlight where things could go wrong if assumptions on growth, margins, or valuation do not hold.

Bearish Takeaways

• Bearish analysts who cut their price targets are flagging that the current valuation may already embed optimistic assumptions around future P/E levels and earnings durability.
• Lower targets point to concern that revenue growth expectations could prove too ambitious if customer spending, product adoption, or deal timing does not track current forecasts.
• The revisions reflect execution risk, with bears focused on the possibility that integration, product roadmap delivery, or go to market efforts might not fully support prior margin and cash flow assumptions.
• Overall, the bearish moves in targets serve as a reminder that even with supportive research elsewhere, Progress Software still faces meaningful downside risk if growth, profitability, or valuation multiples fall short of current models.

What's in the News

• From September 1, 2025 to November 30, 2025, Progress Software repurchased 889,095 shares, representing 2.07%, for US$39.98 million, completing a total buyback of 12,818,339 shares, or 28.66%, for US$581.06 million under the program announced on March 30, 2016 (company buyback update).
• Progress Software was included as one of nine vendors in The Forrester Wave: Digital Experience Platforms, Fourth Quarter 2025. In what the company describes as its debut in that analyst report, it reported the highest possible score of 5.0 in the Search criterion, powered by Progress Agentic RAG (company product announcement).
• The company highlighted that its Digital Experience portfolio, including Progress Sitefinity, is aimed at delivering secure, scalable, personalized digital experiences through trusted AI, with a focus on customer acquisition, retention and business outcomes (company product announcement).
• Progress Software announced the fourth quarter 2025 release of its developer toolsets Progress Telerik and Progress Kendo UI, adding an Agentic UI Generator that uses natural language prompts to create multi component, fully styled page layouts and expanding AI coding assistants across .NET and JavaScript frameworks (company product announcement).
• The release also introduced AI components such as Inline AI prompt, AI optimized Chat UI and prompt driven Data Grid, along with day zero support for .NET 10 and Angular 21. This is aimed at helping development teams use the latest frameworks more quickly (company product announcement).

Valuation Changes

• Fair Value: Model fair value remains unchanged at $45.00. This indicates no shift in the core valuation output.
• Discount Rate: The discount rate has risen slightly from 10.57% to 10.72%, implying a modestly higher required return in the updated assumptions.
• Revenue Growth: The revenue growth assumption has risen slightly from 1.52% to 1.54%, a small upward adjustment to the sales outlook used in the model.
• Net Profit Margin: The net profit margin assumption has risen slightly from 7.87% to 7.89%, reflecting a marginal tweak to expected profitability.
• Future P/E: The future P/E multiple has risen slightly from 29.48x to 29.49x, a very small change in the valuation multiple applied to earnings.