- Roper shares have rebounded more than 10% on multiple sell-side "buy the dip" calls, but have lagged the broader multi-industrial space by more than 30% since mid-August.
- The business mix at Roper gives the company less short-cycle leverage, likely contributing to some of the underperformance, and Roper isn't particularly well-leveraged to popular themes like electrification.
- It's unclear whether Roper is really underinvesting in R&D (a recent bear argument), but the financial leverage is high and Roper may well need to pause large-scale growth-driving M&A.
- At best Roper's long-term prospects appear to be on par with other high-quality industrials, but I think there are better, less-leveraged stories that rely less on M&A.
For further details see:
Roper Has Underperformed Recently, But The Valuation Argument Isn't Clear-Cut