Progress Software Rises 37% in 6 Months: Should You Buy, Sell or Hold?

Progress Software’s PRGS shares have gained 37.4% in the past six months, outperforming the Zacks Computer & Technology sector’s appreciation of 4.7% and the Zacks Computer - Software industry’s growth of 3.5%.PRGS’ shares have outperformed industry peers, including ANSYS ANSS, Cadence Design Systems CDNS and Microsoft MSFT, over the same time frame.ANSYS’ shares have lost 2.5% while Microsoft and Cadence Design Systems’ shares have lost 1.9% and 5.4% respectively.PRGS’ shares are benefiting from growing demand for its AI-powered infrastructure software solutions and a strong focus on high-value recurring revenue streams, which contribute to stable financial performance.Progress Software Corporation Price and Consensus  Progress Software Corporation price-consensus-chart | Progress Software Corporation QuoteHowever, marginal revenue growth of $179 million, up just 2% year over year, and a relatively flat Annual Recurring Revenue (ARR) of $582 million highlight areas of concern for the business.PRGS’ Prospects Ride on Strong PortfolioThe company has a strong data platform with MarkLogic, Semaphore and OpenEdge, offering data management, analytics and app solutions that support long-term growth across industries.PRGS' growth is driven by key products in its portfolio, including DevTools, Sitefinity, LoadMaster, Flowmon, Telerik and MOVEit, each of which have seen increased adoption, contributing to its strong performance.The company recently launched the Q4 2024 release for Telerik and Kendo UI, introducing advanced design-to-code tools and support for .NET 9 and Angular 19.Progress Software recently acquired ShareFile, a SaaS-native, AI-powered platform for content collaboration and workflow automation, enabling more efficient document sharing.Strong Q3 Results Drive PRGS StockThe company posted revenues of $179 million, beating the high end of its $174-$178 million guidance. Earnings per share (EPS) were $1.26, exceeding the $1.11-$1.15 range.The non-GAAP operating margin of 41%, up 200 basis points year over year, indicates strong financial health. This improvement reflects solid top-line growth and the company’s continued focus on expense control and efficient operations.Progress Software’s reduction in days sales outstanding from 49 days to 45 days signals improved revenue collection process efficiency. This decrease reflects better cash flow management and strengthened operational health.Net Customer Retention in the third quarter was 99%, showing the company's strength in retaining customers and delivering steady value, ensuring business stability and growth.PRGS Raises FY24 GuidanceFor the fourth quarter of 2024, Progress Software expects non-GAAP revenues between $207 million and $217 million.The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $211.34 million, indicating year-over-year growth of 19.05%.Progress Software expects non-GAAP earnings to be $1.15-$1.25 per share.  The consensus mark for earnings is pegged at $1.21 per share, indicating 18.63% growth from the figure reported in the year-ago quarter.For 2024, non-GAAP revenues are projected between $745 million and $755 million.The Zacks Consensus Estimate for revenues is pegged at $749.79 million, indicating year-over-year growth of 7.40%.PRGS expects non-GAAP earnings between $4.75 and $4.85 per share. The consensus mark for earnings is pegged at $4.81 per share, indicating year-over-year growth of 10.57%.PRGS’ Zacks RankPRGS currently carries a Zacks Rank #3 (Hold), indicating that waiting for a more favorable entry point in the stock may be wise.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>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 Microsoft Corporation (MSFT): Free Stock Analysis Report Cadence Design Systems, Inc. (CDNS): Free Stock Analysis Report Progress Software Corporation (PRGS): Free Stock Analysis Report ANSYS, Inc. (ANSS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks