Progress Software (PRGS): Assessing Valuation After Major AI Upgrades to Telerik and Kendo UI Toolsets

Progress Software (PRGS) has grabbed the spotlight with its latest Q3 2025 announcement, rolling out major expansions to the AI-powered capabilities within its flagship Telerik and Kendo UI toolsets. This is not a minor update; it represents an across-the-board infusion of AI, deeply embedded into developer workflows, with new coding assistants, workflow integrations, and even AI-powered features for the apps end-users will actually touch. If you hold PRGS or are watching from the sidelines, these moves are difficult to ignore given today’s appetite for productivity gains and integrated AI solutions in enterprise software.

This product evolution comes at a pivotal time. Despite successive launches, such as the self-service Progress Agentic RAG platform earlier this month and the debut of a federal-focused subsidiary, shares of Progress Software have had a rough ride, sliding 26% over the past year. Performance in the past month and past 3 months reveals continued pressure, pointing to fading momentum even as the company steps up its investment in AI innovation.

So with the stock trending lower while AI product launches accelerate, is Progress Software now undervalued in light of future earnings potential, or is the market already discounting the expected growth?

Most Popular Narrative: 39.6% Undervalued

According to the most popular narrative, Progress Software is considered substantially undervalued relative to its fair value estimate, based on a collective expectation of future earnings growth and profitability improvements.

The successful integration of ShareFile has significantly boosted ARR, revenue, and expense savings. This could indicate strong future revenue growth and improved net margins due to operational efficiencies. The strategic focus on SaaS acquisitions, exemplified by ShareFile, allows Progress Software to potentially increase recurring revenue, enhancing revenue predictability and stability over time.

Want the inside story behind this bold undervaluation call? There is a financial forecast here built on game-changing revenue projections, margin improvements, and a multiplier that might surprise you. Find out which long-term earnings expectations could be fueling this optimism. These are the numbers the narrative believes set Progress Software apart from its peers.

Result: Fair Value of $70.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, challenges such as integration missteps or acquiring SaaS assets with weaker margins could quickly shift sentiment regarding Progress Software’s valuation story.

Find out about the key risks to this Progress Software narrative.

Another View: Our DCF Model Weighs In

Looking at Progress Software through the lens of our DCF model gives a different perspective. This approach, focused on future cash flows, also points to undervaluation. Could the market be overlooking hidden value? Or is there something else at play?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Progress Software for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Progress Software Narrative

If the prevailing view does not resonate or you want to explore the numbers firsthand, why not construct your own narrative in just minutes? Do it your way

A great starting point for your Progress Software research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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