With Strong Cash Flow, Roper Technologies Stock Poised to Rise?

Roper Technologies (ROP) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With ROP

ROP stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also below its 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Roper delivered 12% total revenue growth in 2025, fueled by 5% organic expansion and strategic acquisitions like Subsplash to enhance vertical software offerings. Enterprise software bookings grew in the low double-digit range. While Q4 revenue fell short of estimates, impacted by Deltek’s license slowdown and freight market conditions, 2026 guidance projects 5-6% organic revenue growth and 8% total. The company is also integrating AI in products like DAT to improve customer outcomes, supported by $6 billion for M&A and buybacks.

ROP Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 6.1%, but Roper Technologies stock does
• Strong Margin: Last 12 month operating margin of 28.1%
• Growth: Last 12 revenue growth of 14.0% – low growth, but this selection is all about high yield and margin
• Valuation: ROP stock currently trading at 38% below 2Y high, 19% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of ROP fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While ROP stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. ROP slipped 34% in the Dot-Com crash, 50% during the Global Financial Crisis, and 35% around the Covid pandemic. The 2018 correction and recent inflation shock also pushed it down 20% and 27%, respectively. It’s a solid company, but these dips show risk is still real when markets turn sour. Even strong fundamentals don’t always shield you from sharp drawdowns. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ROP Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell ROP Stock.

Stocks Like ROP

Not ready to act on ROP? Consider these alternatives:

1. Salesforce (CRM)
2. Qualcomm (QCOM)
3. Adobe (ADBE)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Portfolios Win When Stock Picks Fall Short

Individual picks can be volatile but staying invested is what matters. A diversified portfolio helps you stay the course, capture upside and reduce downside

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.