Progress Software (PRGS) Valuation Check As Shares Trade Near US$40.92 With Mixed Return Profile

Why Progress Software Stock Is on Investors’ Radar

Progress Software (PRGS) has drawn attention after recent trading, with the share price around $40.92 and a 1 day return of 3%, while longer term returns over the past year remain negative.

For investors, the mix of modest annual revenue growth of about 1% and net income growth around 10%, along with a value score of 4 and an estimated intrinsic discount above 50%, raises questions about how the market is currently weighing its AI focused software portfolio.

See our latest analysis for Progress Software.

Recent trading has been choppy, with a 1 day share price return of 3.05% contrasting with a weaker 90 day share price return of 4.12% and a 1 year total shareholder return of 28.62%. This suggests that momentum has been fading even as interest in AI focused software remains in focus.

If Progress Software has you thinking about where else AI tools could reshape returns, this is a good moment to scan high growth tech and AI stocks for more ideas across the sector.

With Progress Software trading around US$40.92 and estimates indicating a discount of more than 50% to some valuation markers, the key question is straightforward: is this genuine value, or is the market already assuming stronger growth ahead?

Most Popular Narrative: 41.5% Undervalued

At a last close of $40.92 against a most-followed fair value of $70, the current price sits well below what this narrative is working with.

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. Read the complete narrative.

Curious how a steady move toward higher recurring revenue, wider margins, and a different earnings mix might justify that gap? The full narrative outlines the growth path, the earnings reset, and the profit multiple it assumes to reach that fair value.

Result: Fair Value of $70 (UNDERVALUED)

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

However, investors still need to weigh the risk that further SaaS acquisitions or a bumpy ShareFile integration could pressure margins and weaken the earnings story that underpins that valuation gap.

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

Build Your Own Progress Software Narrative

If you look at this and think the assumptions feel off, or you simply prefer to test the numbers yourself, you can build your own view in a few minutes, Do it your way.

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

Looking for more investment ideas?

If Progress Software has caught your eye, do not stop here. Broaden your watchlist with a few focused stock ideas that match how you like to invest.

• Target potential high growth names at lower share prices by scanning these 3530 penny stocks with strong financials that already show solid financial underpinnings.
• Explore the AI theme more broadly by reviewing these 24 AI penny stocks that are directly linked to artificial intelligence.
• Look for potential value opportunities by checking these 875 undervalued stocks based on cash flows that appear inexpensive based on their cash flows.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com