1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Wide-moat Roper Technologies had a solid first quarter that saw management raise its full-year 2021 adjusted EPS guidance. On the heels of this outperformance, we raise our fair value estimate to $467 per share from $452--about 3%, or in line with the stock’s performance on the trading day. About half of the fair value increase was due to time value of money, while the remaining half was due to the raised guidance.
Roper is a diversified technology company that operates out of four segments: application software; network software and systems; measurement and analytical solutions; and process technologies. The firm’s culture emphasizes acquiring asset-light, cash-generative businesses. Roper then reinvests this excess cash in businesses that yield incrementally higher rates of return. While the firm’s businesses are managed in a decentralized manner, Roper does not passively manage its portfolio. Instead, Roper manages its businesses through the Socratic method and empowers decision-makers through group executive coaching. Roper has now rotated a clear majority of its business from legacy industrial products into technology software in mature, niche markets with large quantities of deferred revenue.
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