Update shared on 04 Jul 2026
Fair value Increased 18%Analysts have adjusted their fair value estimate for Progress Software from $34 to $40, citing updated assumptions around discount rates, revenue growth, margins, and a lower Street price target of $50. This followed what was characterized as a solid Q2, with revenue and earnings ahead of expectations and benefits from large deal timing and expense discipline.
What's in the News
- Progress Software reported fiscal Q2 2026 non GAAP EPS of $1.62 and revenue of $253.5 million, ahead of consensus estimates, with management pointing to demand for its AI powered digital experience and infrastructure software portfolio as a key driver (source: Q2 results coverage).
- Management issued full year 2026 guidance for adjusted EPS of $6.09 to $6.21 and revenue of $990 million to $1.02b. The outlook was framed around AI adoption and disciplined capital allocation, including a net leverage target of about 2.8x (source: Q2 results coverage).
- Progress Software launched Progress Chef Enterprise Management for NVIDIA DGX Spark, extending its Chef platform to provide lifecycle management, configuration and compliance for DGX Spark desktop AI supercomputers, with introductory pricing of $189 per year per system (sources: product launch coverage, company client announcement).
- Recent trading saw Progress Software shares move up between 11.7% and more than 16% around the earnings release, reflecting strong investor interest in the company’s role in AI and digital transformation software (source: Q2 results coverage).
- Progress Software was added to multiple Russell indexes, including the Russell Small Cap Comp Value, Russell 2000 Value, Russell 2500 Value, Russell 2000 Dynamic, Russell 2000 Value Defensive, Russell 3000 Value and Russell 3000E Value benchmarks, which can influence how index linked funds and mandates gain exposure to the stock (source: index constituent announcements).
Valuation Changes for Progress Software
- Fair Value Estimate raised from $34.00 to $40.00, a change of about 18%.
- Discount Rate reduced from 11.48% to 10.93%, reflecting a modestly lower required return in the model.
- Revenue Growth Assumption adjusted from 1.02% to 32.59%, indicating a much higher modeled growth rate.
- Net Profit Margin revised slightly from 7.08% to 7.03% in the projections.
- Future P/E increased from 25.49x to 26.83x, implying a higher valuation multiple applied to Progress Software’s earnings outlook.
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