The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 4.1%.
Let’s see how Roper is shaping up this earnings season.
Factors to Note
Strength across the Application Software segment is expected to have driven Roper’s first-quarter performance. Solid momentum across the Deltek, Vertafore, Aderant, CliniSys and Data Innovations businesses is likely to have aided the Application Software segment. Also, strength in its recurring revenue stream, led by strong customer retention, continued migration to SaaS delivery models, focus on the core utility market and new cloud solution is likely to have driven the segment’s performance.
The Network Software & Systems segment is anticipated to have benefited from the strong performance of freight-matching businesses and strength across the Foundry business owing to solid innovation capability in Nuke and Katana. The Zacks Consensus Estimate for the Network Software & Systems segment’s revenues in the first quarter hints at a 1.1% increase from the sequential quarter’s reported figure.
Strength in the Verathon business, driven by single-use Bronchoscopy and Laryngoscopy offerings, is expected to have aided the Technology Enabled Products segment in the first quarter. The Zacks Consensus Estimate for the Technology Enabled Products segment’s revenues in the first quarter hints at a 2.6% increase from the sequential quarter’s reported figure.
The Frontline buyout is expected to have benefited the company’s bottom line in the to-be-reported quarter. The Zacks Consensus Estimate for ROP’s earnings in the first quarter indicates a 2.1% increase from the year-ago reported number.
However, raw material cost inflation and supply-chain constraints are likely to have dented Roper’s performance. The high cost of sales is likely to have weighed on the company’s bottom line. Given Roper’s considerable exposure to overseas markets, adverse foreign currency movements might have impacted the top line.
Our proven model does not conclusively predict an earnings beat for ROP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.
Earnings ESP: ROP has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $3.85. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: ROP presently carries a Zacks Rank of 2.
Highlights of Q4 Earnings
Roper Technologies’ fourth-quarter 2022 adjusted earnings of $3.92 per share surpassed the Zacks Consensus Estimate of $3.77. On a year-over-year basis, earnings increased 16.7%. Roper’s net revenues of $1,430.9 million beat the Zacks Consensus Estimate of $1,418 million. The top line increased 13.9% year over year. Organic sales in the quarter increased 7%, owing to strength across each of the three segments.
Stocks to Consider
Here are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Caterpillar CAT, which has an Earnings ESP of +1.52% and a Zacks Rank of 3, is scheduled to release first-quarter 2023 earnings numbers on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Caterpillar’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 9%.
A. O. Smith Corporation AOS has an Earnings ESP of +10.19% and a Zacks Rank of 3. The company is scheduled to release first-quarter 2023 results on Apr 27.
AOS’ earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters while matching in one, the average beat being 3.2%.
Illinois Tool Works ITW has an Earnings ESP of +1.37% and a Zacks Rank of 3. The company is slated to release first-quarter 2023 results on May 2.
Illinois Tool’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 0.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.