Shares of Roper Technologies (ROP) Are on Sale - But Consider the Risk.

It hasn't been a great aftermarket session for Roper Technologies investors, who have watched their shares sink by -2.3% to a price of $434.11. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.

Roper Technologies, Inc. designs and develops software, and engineered products and solutions. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 21.46 and an average price to book (P/B) ratio of 3.7. In contrast, Roper Technologies has a trailing 12 month P/E ratio of 42.8 and a P/B ratio of 3.3.

P/B ratios are calculated by dividing the company's market value by its equity's book value. Equity refers to all of the company's assets minus its liabilities. Traditionally, a P/B ratio of around 1 shows that a company is fairly valued, but owing to consistently higher valuations in the modern era, investors generally compare against sector averages.

Roper Technologies's PEG ratio is 2.92, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Considering the Roper's stagnant revenues and high debt levels, cautious investors may want to see more evidence of the company's growth potential before committing.

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $5,367 $5,527 $5,778
Revenue Growth n/a 2.99% 4.54%
Gross Margins 63.9% 64.1% 67.8%
Gross Margins Growth n/a 0.31% 5.77%
Operating Margins 27.9% 25.9% 27.3%
Operating Margins Growth n/a -7.17% 5.41%
Earnings Per Share $16.82 $8.98 $10.82
EPS Growth n/a -46.61% 20.49%
Free Cash Flow (MM) $1,399 $1,476 $1,949
FCF Growth n/a 5.53% 32.05%
Capital Expenditures (MM) -$63 -$49 -$63
Net Debt / EBITDA 2.42 4.78 3.4
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.