Will Application Software Strength Continue to Drive Roper’s Growth?

Roper Technologies, Inc.’s ROP Application Software segment continues to play an important role in its overall growth. Strength in the acute healthcare, project-based 
business/government contracting and property & casualty insurance markets is driving the segment’s performance. In the second quarter of 2025, the Application Software segment contributed more than half of the company’s revenues, accounting for 56.3% of the total business. In the same quarter, total revenues from this segment surged 17% year over year while its organic revenues grew 6%.

Solid momentum across the Aderant, Deltek, Vertaforeand and PowerPlan businesses has been driving the segment’s performance. The increasing adoption of software as a service (SaaS) solutions and ongoing innovations in GenAI continue to be major growth drivers for Aderant. Rising demand for SaaS offerings across the GovCon and private sectors and cloud offerings is bolstering Deltek’s performance. Vertafore is realizing strong annual recurring revenue (ARR) growth, supported by its excellent enterprise delivery capabilities to the largest customers in the market. The PowerPlan business is gaining from solid customer retention and growing adoption of its new SaaS solutions.

Also, the TransAct and CBORD businesses are gaining traction, fueled by strong market execution, which supports the segment’s growth. Backed by strong business performance, Roper expects organic revenues from the Application Software segment to rise in the mid-single digits in the second half of 2025. With strong fundamentals, the segment is expected to remain ROP’s primary business catalyst in the near term.

Segment Snapshot of ROP’s Peers

Among its major peers, Autodesk, Inc.ADSK performance is gaining from new business growth, steady subscription renewal rates and strong competitive performance. Higher demand for its cloud-based products, mobile solutions and design suites also bodes well for Autodesk. However, muted growth in Maintenance revenues due to the continued migration of maintenance plans to subscriptions is a concern for Autodesk.

It’s another peer, Atlassian Corp.TEAM, is benefiting from robust paid growth in Atlassian Government Cloud services. The ongoing digitalization of work from organizations and the rapid adoption of cloud services also bode well for Atlassian. During the fourth quarter of fiscal 2025 (ended June 2025), Atlassian’s Cloud revenues increased 25.7% year over year.

ROP’s Price Performance, Valuation and Estimates

Shares of Roper have lost 11.4% in the past year compared with the industry’s decline of 15.9%.

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From a valuation standpoint, ROP is trading at a forward price-to-earnings ratio of 23.38X compared with the industry’s average of 25.87X. Roper carries a Value Score of D.

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The Zacks Consensus Estimate for ROP’s 2025 and 2026 earnings has remained steady over the past 60 days.

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Roper currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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