Roper Technologies, Inc. ROP is well-poised for growth, courtesy of strength across its businesses and accretive acquisitions.

Based in Sarasota, FL, Roper designs, manufactures and distributes software and technology-enabled products and solutions. It caters to selected segments of a broad range of markets, which include legal, healthcare, government, food, transportation, oil & gas, medical and other niche industries.

ROP currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 1.7%.

Image Source: Zacks Investment Research

Let’s delve into the factors that make this company a smart investment choice at the moment.

Business Strength: Roper’s Application Software segment is benefiting from strength across its Deltek, Frontline, Strata, PowerPlan and Aderant businesses. It is witnessing strength in the property and casualty insurance, project-based private sector, healthcare and legal markets. The growing adoption of SaaS solutions and continued GenAI innovation are key catalysts to Aderant’s growth. Solid demand for SaaS solutions in the GovCon sectors and expanding GenAI functionality bode well for the Deltek business. Increased renewal activity in the Frontline business is also driving the segment’s performance. The Strata business is gaining from strong demand for its leading decision support and financial planning solutions in the healthcare market. Strong customer retention and adoption of new SaaS solutions are aiding the PowerPlan business.

Strong momentum across alternate site healthcare businesses, driven by increased demand for software solutions at MHA, is supporting the Network Software segment. Solid demand for Gen AI-powered solutions within the ConstructConnect business is fostering growth of the segment.

The solid performance of the Neptune business, due to continued demand for ultrasonic metes and increasing adoption of meter data management software, is fostering growth of the Technology enabled Products segment. Solid performance of the Verathon business, due to strength across single-use BFlex & GlideScope offerings and continued BladderScan demand, bodes well for the segment.

Expansion Efforts: Over time, ROP has steadily strengthened its business through acquisitions. In February 2024, the company acquired Procare Solutions for $1.75 billion. The buyout expanded Roper’s software offerings in the education sector. In August 2023, the company acquired cloud-based performance management and data solutions provider, Syntellis Performance Solutions, for $1.25 billion. The acquired entity has been integrated into its Strata Decision Technology business, which is part of the Application Software segment. 

Syntellis is expected to contribute approximately $185 million and $85 million to Roper’s revenues and EBITDA, respectively, in 2024, including planned cost synergies. Also, the acquisition of Replicon (August 2023) has been supporting Deltek’s growth by boosting its SaaS solutions portfolio. The buyout is expected to contribute $70 million to revenues and $24 million to EBITDA in 2024.

Rewards to Shareholders: Roper continues to increase shareholders’ value through dividend payments and share repurchases. In the first nine months of 2024, it rewarded its shareholders with dividend payments of $241.1 million, up 10.9% year over year. In November 2024, the company hiked its dividend by 10%.