Is Roper Technologies (ROP) Now Offering Value After A 37.8% One-Year Share Price Slide?

• Investors may be wondering if Roper Technologies at around US$353 a share is starting to look like value, or if the recent volatility is a warning sign.
• The stock has moved 0.8% over the last week and 8.0% over the last 30 days. Year to date it is down 18.6%, and the 1-year return sits at a 37.8% decline.
• Recent coverage has focused on Roper Technologies as a software and technology group with a diversified portfolio of businesses. This can influence how investors think about its resilience and earnings quality. Broader commentary has also highlighted market-wide shifts in how investors are pricing software and technology names, providing additional context for these share price moves.
• On Simply Wall St's framework, Roper Technologies currently holds a valuation score of 6 out of 6. The next sections will break down how different valuation methods arrive at that result and will also hint at a more complete way to think about value at the end of the article.

Find out why Roper Technologies's -37.8% return over the last year is lagging behind its peers.

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

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those back into today’s dollars. It is essentially asking what the stream of future cash the business could generate is worth right now.

For Roper Technologies, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $2.4b. Analysts provide explicit forecasts for several years, and Simply Wall St then extends those forecasts further, with projected free cash flow of $3.7b in 2029 and a full ten year path laid out from 2026 to 2035.

When all of those projected cash flows are discounted back, the estimated intrinsic value from this DCF comes out at about $619.76 per share. At the current share price of around $353, this implies an intrinsic discount of 42.9%, which indicates that the shares are trading at a substantial markdown relative to this cash flow based estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Roper Technologies is undervalued by 42.9%. Track this in your watchlist or portfolio, or discover 52 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

For a profitable company like Roper Technologies, the P/E ratio is a useful way to gauge what investors are currently willing to pay for each dollar of earnings. Higher growth expectations and lower perceived risk usually support a higher “normal” P/E, while slower growth or higher risk tend to justify a lower one.

Roper Technologies currently trades on a P/E of 23.7x. That compares with an average P/E of 29.0x for the broader Software industry and a peer group average of 39.9x, so the shares are priced below both of those benchmarks. However, simple comparisons like this do not adjust for the company’s specific growth outlook, profit margins, market value or risk profile.

Simply Wall St’s Fair Ratio tries to address that gap. It is a proprietary estimate of what Roper Technologies’ P/E would be expected to be, given factors such as its earnings growth, industry, profit margins, size and risk characteristics. For Roper Technologies, the Fair Ratio is 27.1x, which sits above the current 23.7x P/E, suggesting the shares are trading below this tailored yardstick.

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. Narratives on Simply Wall St let you attach a clear story to your numbers by linking your view of Roper Technologies, your forecast for revenue, earnings and margins, and the Fair Value that drops out of those assumptions. You can then compare that Fair Value to today’s price so you can judge whether the stock looks expensive or cheap. Each Narrative on the Community page is refreshed when new data like earnings or news arrives. This is why one investor might build a more upbeat Roper view around AI driven software cash flows, buybacks and a Fair Value near the US$462.19 analyst consensus, while another might lean closer to the cautious US$419.00 bear case or the optimistic US$694.00 bull case, all using the same tool but different stories and inputs.

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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