Progress Software Receives Buy Rating from Oppenheimer

Progress Software (PRGS) received a Buy rating from Oppenheimer analyst Ittai Kidron, who set a price target of $70.00. Kidron has a 5-star rating with an average return of 14.8% and a 55.98% success rate. The company has a one-year high of $70.56 and a one-year low of $47.42, with an average volume of 769.6K.

Oppenheimer analyst Ittai Kidron has upgraded Progress Software (PRGS) to a Buy rating, setting a price target of $70.00. This move comes after the company's strong second-quarter financial performance, which exceeded market expectations. The analyst, known for his 5-star rating and an average return of 14.8%, projects robust growth for PRGS, citing the company's solid financial health and strategic initiatives.

Progress Software reported a 36% increase in total revenue year-over-year, reaching $237 million, and an impressive 46% growth in Annual Recurring Revenue (ARR) to $838 million [2]. The company also achieved a 100% net retention rate and maintained a 40% operating margin. These results were driven by the successful integration of ShareFile, which was completed ahead of schedule, and the acquisition of Nuclia, which is expected to enhance product offerings with advanced AI capabilities.

Despite the positive outlook, Oppenheimer acknowledges some challenges. Free cash flow for the quarter was below expectations due to timing issues and the transition of ShareFile onto Progress's billing system. Additionally, the company's debt remains high, with a total debt of $1.47 billion and a net debt position of $1.37 billion. However, Oppenheimer believes that PRGS is well-positioned to handle these challenges and expects the company to continue its strong performance in the coming quarters.

The analyst's price target of $70.00 represents a potential upside of 46.86% from the current price of $48.80. This target is supported by the company's solid financial performance, strategic initiatives, and the analyst's track record of successful recommendations. Progress Software's shares currently trade at less than 1x estimated next-twelve-month EV/EBITDA to EBITDA growth, a valuation that Oppenheimer considers attractive in a stable macro environment.

References:
[1] https://www.investing.com/news/stock-market-news/oppenheimer-starts-fintech-stock-at-buy-on-strength-in-bnpl-market-4144215
[2] https://www.gurufocus.com/news/2977008/citi-adjusts-price-target-for-progress-software-prgs-amid-updated-q2-model-prgs-stock-news