Progress Software (PRGS) Valuation Check After Recent Share Price Weakness

Progress Software (PRGS) has been drawing attention after recent share price weakness. The stock has shown negative returns over the past month and over the past 3 months, prompting some investors to reassess its current valuation.

See our latest analysis for Progress Software.

Looking beyond the recent pullback, Progress Software’s share price return is soft over both the past quarter and year. The 1 year total shareholder return of a 36.3% decline and the broadly flat 5 year outcome suggest fading momentum rather than a recent setback alone.

If you are reassessing your tech exposure after this move, it could be a good time to broaden your watchlist and check out high growth tech and AI stocks for other ideas in the sector.

With Progress Software trading at $40.09 and sitting at a 57% discount to one intrinsic value estimate and a 65% discount to one analyst target, you have to ask whether this is a genuine opportunity or if the market is already factoring in future growth.

Most Popular Narrative: 42.7% Undervalued

Compared with the last close at $40.09, the most followed narrative points to a fair value of $70, implying a sizeable valuation gap.

The successful integration of ShareFile has significantly boosted ARR, revenue, and expense savings, which could indicate strong future revenue growth and improved net margins due to operational efficiencies.

Read the complete narrative.

For readers curious about what kind of revenue path and margin rebuild could justify that higher value, and what profit multiple ties it all together, the full narrative provides the details.

Result: Fair Value of $70 (UNDERVALUED)

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

However, this hinges on smooth ShareFile integration and disciplined SaaS dealmaking, as higher-than-planned costs or pricey acquisitions could quickly undermine the upbeat case.

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

Another View Using Earnings Multiples

The popular narrative leans on future growth and a higher fair value, but today the shares trade on a P/E of 35.4x, above both the US Software industry at 32.4x and peers at 28.5x. Our fair ratio sits higher again at 44.3x. Is this a cushion or a warning sign if expectations shift?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Progress Software Narrative

If you see the story differently or prefer to weigh the numbers yourself, you can build your own view in a few minutes with Do it your way.

A great starting point for your Progress Software research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Progress Software is on your radar, do not stop there. Widening your shortlist now could help you spot opportunities that others ignore.

• Target potential income by reviewing these 12 dividend stocks with yields > 3% that might fit a yield focused watchlist.
• Spot emerging themes in tech by scanning these 24 AI penny stocks that connect artificial intelligence with real business models.
• Hunt for mispriced opportunities by checking these 873 undervalued stocks based on cash flows that could trade below their estimated cash flow value.

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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