Roper Earnings: Higher Rates May Be a Blessing in Disguise in the M&A Market

We maintain our $530 fair value estimate following wide-moat Roper Technologies’ exceptional first-quarter earnings report. Management raised its full-year guidance on both the bottom-and top-end of the EPS range, to $16.20 at the midpoint (a 15-cent raise). Furthermore, Roper also raised its organic guide by a percentage point on both the bottom- and top-end of the range to 6.5% at the midpoint. During the quarter, total revenue rose nearly 15% to $1.47 billion (8% organically), while free cash flow rose about 4% to $445 million, year on year, or about 14%, excluding a legal settlement. The legal settlement was unusual and truly one-time, given that it was related to a patent dispute for certain sales dating as far back as 2004.