Roper (ROP) to Report Q4 Earnings: What's in the Offing?

Zacks Equity Research
·4-min read

Roper Technologies, Inc. ROP is scheduled to report fourth-quarter 2020 results on Jan 29, before market open.

The company’s earnings beat expectations in the trailing four quarters, the positive surprise being 5.99%, on average. In the last reported quarter, earnings of $3.17 per share surpassed the Zacks Consensus Estimate of $3.01 by 5.32%.

In the past three months, the company’s shares have gained 5.7% compared with the industry’s growth of 13.6%.

Key Factors

Roper is expected to have gained from strength across the network software and medical products businesses along with recovery in short cycle industrial businesses in the fourth quarter. Solid DAT and ConstructConnect businesses, strong customer retention and expanding networks are expected to have augmented its Network Software & Systems segment’s revenues. The Zacks Consensus Estimate for fourth-quarter revenues for the Network Software & Systems segment is pegged at $447 million, indicating a 4% increase from the previous quarter’s reported number.

Also, Roper’s Application Software segment is likely to have performed well in the fourth quarter, driven by strength in its laboratory software business, including Sunquest, Data Innovations and CliniSys. However, lower bookings for its logo software license business is likely to get reflected in the segment’s top-line performance. The consensus mark for fourth-quarter revenues from Application Software is pegged at $563 million, suggesting 25.7% growth on a sequential basis.

In addition, higher demand for the medical products at its Verathon business, along with recovery in Neptune and short cycle industrial businesses, is likely to have been tailwinds for the Measurement & Analytical Solutions segment. The consensus mark for the segment revenues stands at $381 million, suggesting a 3.5% increase on a sequential basis.

Further, strength in the company’s Zetec business, backed by growing popularity for its non-destructive testing solutions, is anticipated to have augmented Roper’s Process Technologies segment in the fourth quarter. However, persistent weakness in upstream oil and gas businesses might have adversely impacted its top-line performance. The consensus estimate for Process Technologies revenues stands at $137 million, implying a 14.2% increase on a sequential basis.

Further, over time, the company has been dealing with the adverse impacts of high cost of sales and operating expenses. These might have affected its margins and profitability in the quarter.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

But that is not the case here as we will see below.

Earnings ESP: Roper has an Earnings ESP of 0.00%, as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $3.49.

Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. Price and EPS Surprise
Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. price-eps-surprise | Roper Technologies, Inc. Quote

Zacks Rank: The company carries a Zacks Rank #3.

Key Picks

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

AGCO Corporation AGCO has an Earnings ESP of +3.34% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

A. O. Smith Corporation AOS has an Earnings ESP of +5.29% and a Zacks Rank of 3, at present.

Eaton Corporation, plc ETN has an Earnings ESP of +2.33% and a Zacks Rank of 3.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AGCO Corporation (AGCO) : Free Stock Analysis Report

A. O. Smith Corporation (AOS) : Free Stock Analysis Report

Eaton Corporation, PLC (ETN) : Free Stock Analysis Report

Roper Technologies, Inc. (ROP) : Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research