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Roper Technologies (Roper Technologies) Intrinsic Value: DCF (Earnings Based) : $206.03 (As of Apr. 25, 2024)


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What is Roper Technologies Intrinsic Value: DCF (Earnings Based)?

As of today (2024-04-25), Roper Technologies's intrinsic value calculated from the Discounted Earnings model is $206.03.

Note: Discounted Earnings model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.

Roper Technologies's Predictability Rank is 3-Stars.

Margin of Safety (Earnings Based) using Discounted Earnings model for Roper Technologies is -159.92%.

The historical rank and industry rank for Roper Technologies's Intrinsic Value: DCF (Earnings Based) or its related term are showing as below:

ROP' s Price-to-DCF (Earnings Based) Range Over the Past 10 Years
Min: 0.67   Med: 1.33   Max: 3.13
Current: 2.6

During the past 13 years, the highest Price-to-Intrinsic-Value-DCF (Earnings Based) Ratio of Roper Technologies was 3.13. The lowest was 0.67. And the median was 1.33.

ROP's Price-to-DCF (Earnings Based) is ranked worse than
90.85% of 306 companies
in the Software industry
Industry Median: 0.95 vs ROP: 2.60

Roper Technologies Intrinsic Value: DCF (Earnings Based) Historical Data

The historical data trend for Roper Technologies's Intrinsic Value: DCF (Earnings Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Roper Technologies Intrinsic Value: DCF (Earnings Based) Chart

Roper Technologies Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Intrinsic Value: DCF (Earnings Based)
Get a 7-Day Free Trial Premium Member Only Premium Member Only 277.97 203.98 164.23 138.05 223.57

Roper Technologies Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Intrinsic Value: DCF (Earnings Based) Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 138.05 143.66 169.25 176.74 223.57

Competitive Comparison of Roper Technologies's Intrinsic Value: DCF (Earnings Based)

For the Software - Application subindustry, Roper Technologies's Price-to-DCF (Earnings Based), along with its competitors' market caps and Price-to-DCF (Earnings Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Roper Technologies's Price-to-DCF (Earnings Based) Distribution in the Software Industry

For the Software industry and Technology sector, Roper Technologies's Price-to-DCF (Earnings Based) distribution charts can be found below:

* The bar in red indicates where Roper Technologies's Price-to-DCF (Earnings Based) falls into.



Roper Technologies Intrinsic Value: DCF (Earnings Based) Calculation

This is the intrinsic value calculated from the Discounted Earnings model with default parameters. The calculation method is the same as Discounted Cash Flow model except earnings are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.73%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 7.20%
The Growth Rate in the growth stage is initially set as the default 10-Year EPS without NRI Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year EPS without NRI Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year EPS without NRI Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Roper Technologies's average EPS without NRI Growth Rate in the past 10 years was 7.20%, which is between 5% and 20%. => GuruFocus defaults => Growth Rate: 7.20%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. EPS without NRI: eps without nri = $15.470.
GuruFocus DCF calculator is actually a Discounted Earnings calculator, EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

Roper Technologies's Intrinsic Value: DCF (Earnings Based) for today is calculated as:

Intrinsic Value: DCF (Earnings Based)=EPS without NRI*{[(1+g1)/(1+d)+(1+g1)^2/(1+d)^2+...+(1+g1)^10/(1+d)^10]
+(1+g1)^10/(1+d)^10*[(1+g2)/(1+d)+(1+g2)^2/(1+d)^2+...+(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.072)/(1+0.11) = 0.96576576576577
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Earnings Based)=EPS without NRI*{[x+x^2+...+x^10]+x^10*[y+y^2+...+y^10]}
=EPS without NRI*[x*(1-x^10)/(1-x)+x^10*y*(1-y^10)/(1-y)]
=15.470*13.3178
=206.03

Margin of Safety % (DCF Earnings Based)=(Intrinsic Value: DCF (Earnings Based)-Current Price)/Intrinsic Value: DCF (Earnings Based)
=(206.03-535.52)/206.03
=-159.92 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Roper Technologies  (NAS:ROP) Intrinsic Value: DCF (Earnings Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book Value per Share, Graham Number, Median Ratio etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.


Be Aware

What you need to know about Discounted Earnings model:

1. The Discounted Earnings model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that are relatively consistent performers.
4. The Discounted Earnings model works poorly for inconsistent performers like cyclicals.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.


Roper Technologies Intrinsic Value: DCF (Earnings Based) Related Terms

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Roper Technologies (Roper Technologies) Business Description

Industry
GURUFOCUS.COM » STOCK LIST » Technology » Software » Roper Technologies Inc (NAS:ROP) » Definitions » Intrinsic Value: DCF (Earnings Based)
Traded in Other Exchanges
Address
6901 Professional Parkway East, Suite 200, Sarasota, FL, USA, 34240
Roper is a diversified technology company that operates through three segments: application software; network software and systems; and technology enabled products. The firm's culture emphasizes acquiring asset-light, cash-generative businesses. Roper then reinvests this excess cash in businesses that yield incrementally higher rates of return. While the businesses are managed in a decentralized manner, Roper does not passively manage its portfolio. Instead, Roper manages its businesses through the Socratic method and empowers decision-makers through group executive coaching. Roper has now rotated a clear majority of its business from legacy industrial products into technology software in mature, niche markets with large quantities of deferred revenue.
Executives
Robert D Johnson director HONEYWELL, 1944 E SKY HARBOR CIRCLE, PHOENIX AZ 85034
Christopher Wright director C/O GENAISSANCE PHARMACEUTICALS INC, 5 SCIENCE PARK, NEW HAVEN CT 06511
Laurence Neil Hunn officer: Executive Vice President 100 NORTH POINT CENTER EAST, SUITE 200, ALPHARETTA GA 30022
Shellye L Archambeau director 1095 AVENUE OF THE AMERICAS, 8TH FLOOR, NEW YORK NY 10036
Jason Conley officer: Vice President and Controller C/O ROPER TECHNOLOGIES, INC., 6901 PROFESSIONAL PARKWAY, SARASOTA FL 34240
Richard F Wallman director HONEYWELL, 101 COLUMBIA ROAD, MORRISTOWN NJ 07962
Brandon L Cross officer: VP and Corporate Controller 6901 PROFESSIONAL PARKWAY, SUITE 200, SARASOTA FL 34240
Robert Crisci officer: Vice President and CFO C/O ROPER TECHNOLOGIES, INC., 6901 PROFESSIONAL PARKWAY, SARASOTA FL 34240
John K Stipancich officer: VP, GC & Secretary C/O ROPER TECHNOLOGIES, INC., 6901 PROFESSIONAL PARKWAY E, STE. 200, SARASOTA FL 34240
Joyce Thomas Patrick Jr director 2099 PENNSYLVANIA AVENUE, NW, 12TH FLOOR, WASHINGTON DC 22207
Irene M Esteves director C/O TIME WARNER CABLE INC., 60 COLUMBUS CIRCLE, 17TH FLOOR, NEW YORK NY 10023
Amy Woods Brinkley director BANK OF AMERICA CORP, 100 NORTH TRYON ST NC1-007-58-04, CHARLOTTE NC 28255
Fort John F Iii director C/O ROPER INDUSTRIES INC, 2160 SATELLITE BLVD, DULUTH GA 30097
Wilbur J Prezzano director 13515 BALLANTYNE CORPORATE PL, CHARLOTTE NC 28277
Knowling Robert E Jr director C/O HEWLETT-PACKARD CO, 3000 HANOVER STREET, PALO ALTO CA 94304

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