Progress Software ( PRGS ) reported quarterly earnings of $1.25 per share, beating the Zacks’ consensus estimate of $1.14 per share. That compares with earnings of $1.19 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report presents a profit surprise of 9.65%. A quarter ago, this business software maker was expected to post earnings of $0.91 per share, but it actually produced earnings of $1.02, bringing in a surprise of 12.09%.
Over the past four quarters, the company has beaten consensus EPS estimates four times.
Progress Software, which belongs to the Zacks Computer – Software industry, reported revenue of $184.69 million for the quarter ending February 2024, topping the Zacks’ consensus estimate of 1.59%. That compares to last year’s revenue of $165.61 million. The company has beaten consensus revenue estimates four times in the last four quarters.
The sustainability of the current stock price movement based on recently released numbers and future earnings expectations will depend mostly on management’s commentary on the earnings call.
Shares of Progress Software have lost about 2.8% since the start of the year versus the S&P 500’s gain of 9.4%.
What’s next for Progress Software?
While Progress Software has underperformed the market so far this year, the question on investors’ minds is: What’s next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this question is a company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.
Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a proven rating tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the trend of estimate revisions for Progress Software: mixed. While the size and direction of the estimate revisions could change after the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the stock is expected to be in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how the estimates for the upcoming quarters and the current fiscal year change in the coming days. The current EPS consensus estimate is $1.17 on $182.93 million in revenue for the upcoming quarter and $4.63 on $729.14 million in revenue for the current fiscal year.
Investors should keep in mind the fact that the outlook for the industry can also have a significant impact on a stock’s performance. In terms of Zacks Industry Rank, Computer – Software is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of Zacks-Rank industries outperform the bottom 50% by a factor of more than 2-to-1.
Another stock from the same industry, Manhattan Associates ( MANH ), is yet to report results for the quarter ended March 2024.
This business software company is expected to post quarterly earnings of $0.87 per share in its upcoming report, representing a year-over-year change of +8.8%. The consensus EPS estimate for the quarter was unchanged over the past 30 days.
Manhattan Associates’ revenue is expected to be $243.32 million, up 10.1% year-over-year.
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