Progress Software (PRGS) Plunges 2.92% on Earnings Disappointment

Progress Software (PRGS) shares tumbled 2.92% today, marking the second consecutive day of decline, with a total drop of 15.57% over the past two days. The stock price hit its lowest level since March 2025, experiencing an intraday decline of 3.51%.

The strategy of buying PRGS shares after they reached a recent low and holding for one week yielded a 21.00% return, underperforming the benchmark by 35.99%. The CAGR was 8.00%, with a maximum drawdown of -25.32% and a Sharpe ratio of 0.33, indicating significant volatility and moderate returns.

Progress Software reported stronger-than-expected Q2 earnings, but the revenue fell short of expectations. This discrepancy, along with worsening margins and slow quarter-over-quarter ARR growth, contributed to the decline in share prices. Analysts pointed out that the company's Q2 results were significantly influenced by the ShareFile acquisition, which obscured the lackluster organic growth. This raised concerns about the company's growth strategy and the early stage of its SaaS offerings.

Despite the positive EPS revisions, the stock price experienced volatility. DA Davidson raised their price target for Progress Software from $70.00 to $75.00, indicating some confidence in the company's future performance. However, the market reaction was negative, with shares gapping down before the market session, reflecting the overall negative sentiment despite earnings topping estimates. Additionally, insider trading activity showed increased direct ownership by the COO, which modestly reinforced management-shareholder alignment but was not through open-market purchases.