ROP - Roper Technologies: Quest For Quality Creating Uncertainty

2024-04-27 17:00:00 ET

Summary

• Roper Technologies has shifted its focus to vertical SaaS businesses, resulting in higher margins and more predictable revenue.
• This shift supports a higher revenue multiple, but Roper's valuation now looks stretched.
• In addition, Roper has deployed a large amount of capital in recent years and the long-term impact of this is not clear yet.

Roper Technologies' ( ROP ) business has changed enormously in recent years, with the company now generally focusing on vertical SaaS businesses. In many ways this is a positive as Roper's margins are now higher and its revenue is more predictable. Given Roper is acquiring these businesses rather than building them, it is less clear how compelling the real benefits are though. ...

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