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What's in the Cards for Roper (ROP) This Earnings Season?

Roper Technologies, Inc. ROP is slated to report second-quarter 2019 results on Jul 25, before market open.

The company pulled off average positive earnings surprise of 8.43% in the preceding four quarters, beating estimates in each. Notably, Roper’s first-quarter adjusted earnings of $3.30 per share outpaced the Zacks Consensus Estimate of $2.78 by 18.71%.

In the past three months, the company’s shares have gained 6.6% against the industry’s decline of 0.8%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Roper is likely to benefit from the strong momentum in network, software and product businesses. Also, strength in DAT, MHA, RF IDeas and TransCore businesses along with Foundry acquisition (closed in April 2019) is likely to drive the company’s revenues of the Network Software & Systems segment. In addition, strength in Hospital Decision Support SaaS bookings is likely to boost Application Software segment’s revenues. Further, robust demand for optical measurement systems and consumables will stoke growth.

Also, the company’s unique asset-light business model and its strategy to expand business across niche markets are likely to boost second-quarter revenues. In addition, its innovative product pipeline is expected to be a major growth driver.

Further, the company expects stronger revenues and greater operational efficiency to boost its profitability. Notably, it anticipates generating earnings of $3.00-$3.04 per share for the second quarter.

Moreover, given its earnings strength and impressive growth strategies, Roper is expected to continue enhancing shareholder value through efficient capital deployment activities. It is worth mentioning here that the company increased the quarterly dividend rate by 12% or 5 cents per share to 46.25 cents in November 2018. On an annualized basis, the dividend increased to $1.85 from $1.65 per share. We believe that such initiatives are reflective of a strong cash position.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) for a likely earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

That is not the case here as we will see below.

Earnings ESPRoper has an Earnings ESP of -0.27%.

Roper Technologies, Inc. Price and EPS Surprise

Roper Technologies, Inc. price-eps-surprise | Roper Technologies, Inc. Quote

Zacks Rank: The company sports a Zacks Rank #1, which when combined with a negative ESP makes surprise prediction difficult.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Key Picks

Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat estimates this earnings season:

Axon Enterprise, Inc. AAXN has an Earnings ESP of +10.96% and a Zacks Rank #2.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Dover Corporation DOV has an Earnings ESP of +1.65% and a Zacks Rank #3.

Illinois Tool Works Inc. ITW has an Earnings ESP of +0.30% and a Zacks Rank #3.

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