ROPER TECHNOLOGIES INC (ROP): what the price requires

At today's price, ROPER TECHNOLOGIES INC (ROP) is priced for +1.8% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ROP

Headline

Field	Value
Ticker	ROP
Company	ROPER TECHNOLOGIES INC
Current price	$359.56/sh
Composition	Recurring 57% / Reoccurring 11% / Non-recurring 10% / Product Revenue 22%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin needed	4.6%
Operating margin today	27.9%
Margin compression implied	-23.3pp
Implied growth	1.8%
Multiple paid	21x operating income

The operating-margin requirement is derived from the framework's value band at year 11, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 7.1% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.1pp.

Reconcile: at the x-ray's 9.3% required return this reads ~17.4%/yr; the models below use their own rates.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.90σ
cohort percentile (of 177 peers)	36
implied end-window share	0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	2.05x	5	expensive
Earnings	2.08x	5	expensive
Relative	1.30x	5	expensive
Growth	1.20x	3	expensive

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.4%); the inversion above states its own rate.

Per-Model Detail (n=18)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$500.15	0.72x	yes	FCF base $2.8B, growth 12% (input: historical growth), terminal g 4.0%, WACC 7.4%, 6yr projection
DCF Exit Multiple	Growth	$299.98	1.20x	yes	Exit EV/EBITDA: 18.8x / 20.8x / 22.8x (bear / base = today's held flat / bull), 6yr
Relative Valuation	Relative	$277.45	1.30x	yes	P/E 18x (static sector reference · 2026-04), scenarios: 14.8x / 18.0x / 21.2x (bear / base = reference held flat / bull), EV/EBITDA 14.65x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$177.16	2.03x	yes	BV/sh $179.90, ROE (TTM) 9.1%, ke 9.3%
Two-Stage Excess Return	Asset	$175.82	2.05x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$187.88	1.91x	yes	Rev $8.1B, growth 12% (input: historical growth; tapered), Terminal P/S: 3.8x / 4.6x / 5.4x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair Value	Relative	$288.19	1.25x	yes	EPS $16.01, growth 18% (input: historical EPS growth), PEG=1.22 (Fair)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$54.02	6.66x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $1.86B × (1−20%) / WACC 7.4% → EPV (no growth)
Residual Income	Asset	$175.59	2.05x	yes	BV $179.90 + 5yr PV of (ROE (TTM) 9.1% − Kₑ 9.3%) × BV; BV grows 5.9%/yr
Graham Number	Asset	$254.57	1.41x	yes	√(22.5 × EPS $16.01 × BVPS $179.90) — Graham's conservative floor
EV/EBITDA Relative	Relative	$166.25	2.16x	yes	EBITDA $2.29B × sector EV/EBITDA 12.0x
FCF Yield	Earnings	$172.72	2.08x	yes	FCF $2603.7M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$154.11	2.33x	yes	SBC-adj FCF $2.42B (FCF $2.60B − SBC $0.18B) capitalized at Kₑ
Ben Graham Formula	Earnings	$516.59	0.70x	yes	EPS $16.01 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	$38.39	9.37x	yes	BV $179.90 × (ROIC 1.6% / WACC 7.4%)
P/Sales Sector	Relative	$193.95	1.85x	yes	Revenue $8.12B × sector P/S 2.5x
PEG Fair Value	Relative	$432.28	0.83x	yes	EPS $16.01 × (PEG 1.5 × growth 18.0% (input: historical EPS growth)) → PE 27.0x
Earnings Yield	Earnings	$173.08	2.08x	yes	EPS $16.01 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$10.1b
Net debt / NOPAT (after-tax)	5.67x
Net debt / operating income (pre-tax)	4.55x
Interest coverage	6.7x
Share count CAGR (buyback)	-0.5%
Burning cash	no

Bullet Takeaways

The number that defines Roper is recurring revenue at 57% of the mix, rising toward 68% once volume-based fees are included, which is why a 28% operating margin business gets valued like software rather than industrials.
Growth is bought, not just grown: management deployed $3.3B on acquisitions in 2025, and the model depends on a steady pipeline of niche vertical-software targets to keep compounding.
The next read is execution against raised guidance: full-year 2026 adjusted diluted EPS guidance was lifted to $21.80 to $22.05 on roughly 8% revenue growth.

Bull Case

The single most decisive number for Roper is the share of revenue that recurs. The filing describes a business built on "volume-based fees facilitated through our software" on top of subscription software, and recurring revenue is 57% of the mix with another 11% of reoccurring volume-based fees layered on. That is roughly two-thirds of an $8 billion revenue base arriving whether or not the customer makes a new decision. A business with that revenue shape and a 28% operating margin is not an industrial company; it is a portfolio of vertical-software monopolies that happens to sit under an industrial-sounding name.

The moat is niche dominance, repeated dozens of times. Each Roper business runs mission-critical software for a specific industry, embedded in the customer's workflow, where switching means rebuilding the way the customer operates. The filing notes the software is "embedded within customers' mission-critical workflows" and increasingly AI-enabled, leaning on proprietary data and long-standing relationships. These are small markets the giants ignore, which is exactly why the pricing power is durable: there is no scale competitor coming for a $200 million construction-software vertical.

The compounding engine is capital allocation. Roper recycles the cash these businesses throw off into more of them, deploying $3.3 billion on acquisitions in 2025, including CentralReach, where the filing details $776 million of acquired customer relationships on a 19-year useful life. The long useful life is the tell: management is buying customer bases that last. With full-year 2026 adjusted diluted EPS guidance raised to $21.80 to $22.05 on about 8% revenue growth, the machine is still converting acquisition spend into earnings growth.

Bear Case

The bear case for Roper is not that the price is wildly stretched; it is that the price embeds a model that has to keep working in two places at once. At about 19 times operating income the market is paying for company-wide operating profit to hold roughly flat in organic terms, which is within what Roper has delivered. But the headline growth depends on continuing to buy businesses, and the value question is whether the acquisition pipeline keeps producing fairly priced targets. When a roll-up has to deploy billions a year to grow, the risk is not a single bad quarter; it is paying up for the next deal in a competitive market for software assets.

The debt is the second pressure. Net debt is about $10.1 billion, roughly 4.4 times operating income, with interest covered about 6.3 times. That is manageable while rates and cash flow cooperate, but it is the financing that fuels the acquisitions, so a tighter credit window slows the growth engine precisely when organic growth would need to carry more of the load. The asset-value and earnings-power methods read the price as expensive, several landing well below it, because they value the businesses Roper owns today without crediting the deals it has not done yet. The relative-multiple and growth methods reach the price; the static methods do not.

The specific soft spots are already visible. Management's own guidance assumes no meaningful improvement in Deltek's government-contracting market or DAT's freight market and modest top-line weakness at Neptune. Those are three of the larger businesses leaning, and the filing acknowledges that its acquisition accounting rests on "projected revenue growth rates, future operating margins, discount rates, terminal values, and earnings multiples" that could differ significantly from reality. A roll-up carries goodwill from every deal; when an acquired vertical underperforms the projections baked into its purchase, the writedown lands on a balance sheet already carrying $10 billion of debt.

Valuation

What the price is paying for is modest, which is the unusual part. At about 19 times operating income, inverting the price implies company-wide operating growth of roughly flat, around negative half a percent a year, over a five-year window. Roper earns a 28% operating margin today, and the near-term pace the price needs is within what it has recently delivered. The stretch, such as it is, lives in duration rather than rate. By the standards of the business this report usually examines, that is a price broadly consistent with plausible growth, sitting in the lower half of its peer multiple range.

The methods split on the roll-up itself. Relative multiples and the forward-growth methods land at or near the price, because they credit the recurring-revenue base and the historical compounding. The asset-value and earnings-power methods land below the price, several of them well below, because they value only the businesses Roper owns now and assign nothing to the deals to come. That spread is the precise description of a serial acquirer: cheap on what it will build, expensive on what it holds. The recurring-revenue mix, 57% recurring plus 11% reoccurring, is what lets the forward methods reach the price at all.

Solvency is where the model shows its cost. Net debt of about $10.1 billion is roughly 4.4 times operating income, with interest covered about 6.3 times, and the share count has edged down about half a percent a year. The leverage is the fuel line for acquisitions, not a sign of distress, but it does mean the downside is more sensitive to the credit window than a debt-free compounder would be. The decisive variable is the same one the bull and bear share: whether the next dollars of acquisition spend keep converting into earnings at the rate the last decade did.

Catalysts

Roper closed 2025 with adjusted diluted EPS of about $20 and entered 2026 raising its outlook. Following Q1 2026 results, management lifted full-year 2026 adjusted diluted EPS guidance to $21.80 to $22.05, held total revenue growth guidance near 8% and organic growth at 5% to 6%, and guided Q2 2026 adjusted diluted EPS to $5.25 to $5.30. The guidance raise is the signal that the recurring base plus the 2025 acquisition cohort is carrying into the year as planned.

The acquisition cadence is the other catalyst that matters for this business, because deals are how Roper grows. The company deployed $3.3 billion on acquisitions in 2025 and continues to target niche vertical-software businesses. Each sizable deal resets the forward earnings trajectory, so announced acquisitions and their multiples are the events to watch alongside the quarterly print.

The near-term risk is concentrated in three businesses management has already flagged. The 2026 outlook assumes no improvement in Deltek's government-contracting market or DAT's freight market and modest weakness at Neptune. A turn in any of those would be upside to guidance; continued softness is the most likely source of a miss. The next earnings date and any large acquisition announcement are the two things that move the story from here.

Peer Cohorts (Per Segment, With Filing Citations)

Application Software (reported)

TYL (TYLER TECHNOLOGIES, INC.)
(no filing in the citation store)
MANH (MANHATTAN ASSOCIATES, INC.)
(no filing in the citation store)
PCOR (Procore Technologies, Inc.)
(no filing in the citation store)
VEEV (Veeva Systems Inc.)
(no filing in the citation store)
BSY (BENTLEY SYSTEMS, INCORPORATED)
(no filing in the citation store)
DSGX (DESCARTES SYSTEMS GROUP INC)
(no filing in the citation store)
AGYS (AGILYSYS, INC.)
(no filing in the citation store)
APPF (AppFolio, Inc.)
(no filing in the citation store)

Technology Enabled Products (reported)

ITRI (Itron, Inc.)
(no filing in the citation store)
MWA (MUELLER WATER PRODUCTS, INC.)
(no filing in the citation store)
BMI (BADGER METER, INC.)
(no filing in the citation store)
XYL (Xylem Inc.)
(no filing in the citation store)
DHR (Danaher Corporation)
(no filing in the citation store)
MTD (Mettler-Toledo International Inc.)
(no filing in the citation store)
TMO (THERMO FISHER SCIENTIFIC INC.)
(no filing in the citation store)
RVTY (REVVITY, INC)
(no filing in the citation store)

Methodology Note

Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Roper FY2025 results, January 2026 · Roper Q1 2026 earnings release, April 2026