Analyst Note| Joshua Aguilar |
Wide-moat-rated Roper printed solid third-quarter results that marginally exceeded the adjusted earnings per share expectations we earmarked after the last earnings cycle (which included what are now discontinued operations). Despite the supply chain challenges plaguing the entire industrial sector, on a continuing operations basis, revenue totaled just over $1.46 billion during the quarter, good for a 22% year-on-year increase (or 12% on an organic basis). And while EBITDA margins compressed by 30 basis points, the sales increase allowed propelled adjusted diluted EPS (on an continuing basis) forward to $3.60, good for a 24% year-on-year increase. Nonetheless, aside from timing of cash flows, nothing materially alters our long-term view of the firm. We raise our fair value estimate by $1 to $486 due to time value of money. While we continue to like the company and its long-term prospects, the stock trades in line with our expectations of future free cash flows.