Progress Software Rises 37% in 6 Months: Should You Buy, Sell or Hold?

Core Insights - Progress Software's (PRGS) shares have increased by 37.4% over the past six months, significantly outperforming the Zacks Computer & Technology sector's growth of 4.7% and the Zacks Computer - Software industry's growth of 3.5% [1] - The company is experiencing strong demand for its AI-powered infrastructure software solutions, contributing to stable financial performance despite marginal revenue growth [2] Financial Performance - PRGS reported revenues of $179 million for Q3, exceeding its guidance of $174-$178 million, with earnings per share (EPS) of $1.26, surpassing the expected range of $1.11-$1.15 [5] - The non-GAAP operating margin improved to 41%, reflecting a 200 basis points increase year over year, indicating strong financial health [5] - The company has reduced days sales outstanding from 49 to 45 days, signaling improved revenue collection efficiency and better cash flow management [6] Growth Prospects - PRGS has raised its FY24 guidance, expecting non-GAAP revenues between $745 million and $755 million, with a Zacks Consensus Estimate of $749.79 million, indicating a year-over-year growth of 7.40% [10] - For Q4 2024, the company anticipates non-GAAP revenues between $207 million and $217 million, with a consensus estimate of $211.34 million, reflecting a year-over-year growth of 19.05% [7] Product Development - The company has a robust data platform with products like MarkLogic, Semaphore, and OpenEdge, which support long-term growth across various industries [3] - Recent product launches include the Q4 2024 release for Telerik and Kendo UI, featuring advanced design-to-code tools and support for .NET 9 and Angular 19 [4] Customer Retention - PRGS achieved a net customer retention rate of 99% in Q3, demonstrating its strength in retaining customers and delivering consistent value [6]