Is It Time To Reassess Roper Technologies (ROP) After Its 40% Share Price Slide?

• If you are wondering whether Roper Technologies at around US$344 is starting to look like value or still has room to fall, you are not alone.
• The stock is roughly flat over the last month at 0.1%, but that sits against a year-to-date return of a 20.7% decline and a 40.5% decline over the past year, which can change how the market views its risk and reward profile.
• Recent coverage has focused on how software and technology names like Roper Technologies are being repriced as investors reassess growth, profitability and balance sheet quality across the sector. This context matters because broad sentiment shifts can move share prices even when company specific news flow is quiet.
• Simply Wall St currently scores Roper Technologies at 6/6 on its valuation checks. The sections that follow will walk through the key valuation tools behind that score, then close with a more holistic way to think about what the stock might be worth.

Find out why Roper Technologies's -40.5% return over the last year is lagging behind its peers.

Approach 1: Roper Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s value, which gives an estimate of what the business might be worth per share.

For Roper Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $2.4b. Analyst estimates and Simply Wall St extrapolations suggest free cash flow projections ranging from about $2.7b in 2026 to around $5.3b in 2035, with $3.7b in 2029 specifically noted.

When these projected cash flows are discounted back to today, the DCF model indicates an estimated intrinsic value of about $621.31 per share. Compared with a current share price around $344, this implies an intrinsic discount of roughly 44.6%, which indicates the shares are trading at a substantial discount to this cash flow based estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Roper Technologies is undervalued by 44.6%. Track this in your watchlist or portfolio, or discover 61 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Roper Technologies.

Approach 2: Roper Technologies Price vs Earnings (P/E)

P/E is a common way to value profitable companies because it links what you pay for each share to the earnings that business is currently generating. In general, higher expected growth and lower perceived risk can support a higher “normal” P/E ratio, while slower growth or higher risk usually points to a lower one.

Roper Technologies currently trades on a P/E of 23.1x. That sits below both the broader Software industry average of about 27.3x and the peer group average of around 34.4x, so investors are paying less per dollar of earnings than for many comparable stocks. Simply Wall St also calculates a proprietary “Fair Ratio” of 27.1x for Roper Technologies, which reflects factors such as its earnings growth profile, industry, profit margins, market value and risk characteristics.

This Fair Ratio is more tailored than a simple peer or industry comparison because it attempts to adjust for company specific features rather than assuming all software names deserve similar P/E levels. Comparing the Fair Ratio of 27.1x with the current P/E of 23.1x suggests the shares are pricing in a lower multiple than this model would imply.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Roper Technologies Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, which let you turn your view of Roper Technologies into a clear story that connects assumptions about future revenue, earnings and margins to a financial forecast, a Fair Value estimate and then a simple comparison with today’s share price. All of this is available within an easy tool on Simply Wall St’s Community page that automatically updates as new news or earnings arrive. Narratives can range from a more cautious stance that might anchor closer to the US$419 Fair Value used by bearish analysts to a more optimistic view nearer the US$694 Fair Value used by bullish analysts. This can help you decide how Roper Technologies might fit into your own framework without having to build a full model yourself.

Do you think there's more to the story for Roper Technologies? Head over to our Community to see what others are saying!

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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