Revenue +29.8% — strong growth, well above S&P median (~7%)
D/E2.62D
D/E 2.62 — most levered decile in Technology (≈95th pctile)
P/E18.7xA-
P/E 18.7 — cheaper than most Technology peers (≈25th pctile)
PEG1.30B
PEG 1.30 — acceptable premium for growth
Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.
Quality-growth score · 79.7
Quality0.67
Growth0.98
Value0.77
Why this score
Buying back stock
Entry · Margin of safety
52-week rangeMid-range
25% off the 12-month high
vs DCF fair value69% belowest. fair value ~$124
Quality signals · context only
Gross profitability35% · B+gross profit ÷ total assets (Novy-Marx)
ROIC7.6% · C+return on invested capital — not score-weighted
Why now
Progress Software is a deeply undervalued growth compounder, trading at an absurdly low 1.5x P/S multiple for a software company delivering 29.8% FY YoY revenue growth. Its robust free cash flow of $305m against a $1.5b market cap translates to an exceptional 20.3% FCF yield, indicating significant cash generation that the market is failing to price in. The crux is the persistent demand for its foundational tools like Agentic RAG and Automate MFT, which are critical for developing and managing AI-powered applications and digital experiences, ensuring continued compounding of its cash flows.
Moat
Progress Software's durable edge is rooted in the high switching costs associated with its deeply integrated infrastructure software, such as Chef for DevOps/DevSecOps automation and DataDirect for secure data connectivity. These mission-critical tools become embedded in enterprise workflows for developing and managing AI-powered applications and digital experiences, making migration to alternatives costly and disruptive. This stickiness underpins its strong operational performance and allows the company to sustain its 17.6% ROE, protecting its recurring revenue streams.
Risk
The primary bear case against Progress Software centers on its elevated debt-to-equity ratio of 2.62, which could become a significant burden if its robust free cash flow generation were to falter. Despite strong revenue growth, the relatively modest 8.9% profit margin suggests potential pricing pressure or operational leverage limits in the highly competitive market for AI-powered application development and digital experience platforms. A sustained deceleration in revenue growth below its current 29.8% rate, coupled with increasing interest expenses, would signal that the company's debt load is becoming unsustainable and confirm the bear thesis.
Horizon
1-3 yr $50.67 (6-analyst consensus) — fundamentals + valuation re-rating. 5 yr $74.18 at ~14% CAGR — compounding case rests on the competitive position widening. 10 yr $110.04 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Position sizing · PRGS
$
%
%
Shares to buy
51
Position size
$1,964
3.9% of portfolio
Stop price
$28.88
25% below $38.50
$ at risk if stopped
$490.88
budget $500.00 · 1% of portfolio
Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.
Progress Software Corporation (PRGS) is a Software - Infrastructure company that scores 79.7 out of 100 on the Bull Rankings quality-growth model — a strong reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.
Its strongest graded signals are Rev (A-) and P/E (A-), while D/E (D) rate weaker. On valuation, PRGS sits about 69% below our discounted-cash-flow fair value (a margin of safety).
Is PRGS a good stock to buy?
Bull Rankings scores PRGS 79.7 out of 100 on its quality-growth model, which is a strong reading. That is driven by Rev (A-) and P/E (A-). A score is a quantitative screen of Progress Software Corporation's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.
Why does PRGS score 79.7 on Bull Rankings?
The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). PRGS earns its highest marks on Rev (A-) and P/E (A-), and is held back by D/E (D). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.
Is PRGS overvalued or undervalued?
Based on $38.50, PRGS sits about 69% below our discounted-cash-flow fair value (a margin of safety). It trades at a 18.7x× P/E (graded A-). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.
What are the main risks of investing in PRGS?
The primary bear case against Progress Software centers on its elevated debt-to-equity ratio of 2.62, which could become a significant burden if its robust free cash flow generation were to falter. Despite strong revenue growth, the relatively modest 8.9% profit margin suggests potential pricing pressure or operational leverage limits in the highly competitive market for AI-powered application development and digital experience platforms. A sustained deceleration in revenue growth below its current 29.8% rate, coupled with increasing interest expenses, would signal that the company's debt load is becoming unsustainable and confirm the bear thesis.
Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.