On Tuesday, Roper Technologies (ROP +1.22%) published its final set of 2025 earnings. That led to a sell-off in the tech software conglomerate to leave its shares with a nearly 9% loss over the course of this week, according to data compiled by S&P Global Market Intelligence.
Revenue and profitability headed north
That occurred despite Roper's not-bad fourth quarter results. Revenue for the period bounced 10% higher year-over-year to $2.06 billion. Management attributed this almost equally to recent acquisitions contributing to the total and organic growth. Meanwhile, Roper's net income not in accordance with generally accepted accounting principles (GAAP) advanced 8% higher to hit $561 million, or $5.21 per share.
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The company slightly missed the average consensus analyst revenue estimate of $2.08 billion. On the other hand, it topped the $5.14 collective pundit forecast for adjusted profitabiity.
In its earnings press release, the company quoted CEO Neil Hunn as saying it's entered 2026 "with a fundamentally stronger foundation, following meaningful enhancements last year to our leadership talent, AI technical capabilities, capital deployment discipline, and operating model."
NASDAQ: ROP
Key Data Points
A hard line on software
Hunn's optimistic words matched Roper's guidance for full-year 2026. It's modeling revenue growth of 8% over 2025's $7.9 billion, with adjusted net income of $21.30 to $21.55 per share. Alas, both estimates are lower than the average analyst forecasts of 9% revenue growth and adjusted, per-share profitability of $21.65.
Despite the CEO's mention of AI in his comments, Roper is basically a collection of software businesses, and as such is out of favor (as the AI stock craze more or less persists). This makes it something of a sleeper stock to begin with, and a "disappointing" earnings report only enhances its current discount. I'd consider it a sleeper stock worthy of buy consideration now.
Some professional Roper-watchers would disagree. One of the more bearish moves made by that crew post-earnings was by Stifel's Brad Reback, who downgraded the shares to hold from his previous buy. He also sharply cut his price target to $385 per share from $550.
