Progress Software Price Targets Up After Swing to Quarterly Profit

Progress Software shares fell, even as two analysts raised their price targets. The company swung to a quarterly profit and issued a mixed outlook.
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Progress Software  (PRGS) - Get Report shares fell on Friday, even as two analysts raised their price targets. The business-applications provider swung to a quarterly profit and issued a mixed outlook.

A mixed earnings outlook also hurt. Progress forecast GAAP earnings per share would slide and and operating margin would narrow this fiscal year.

Progress, Bedford, Mass., recently traded at $47.30, down 3.1%. The shares climbed 8% over the past year through Thursday.

In the fiscal 2020 fourth quarter ended Nov. 30, GAAP earnings per share were 39 cents, swinging from a loss of 11 cents in the year-earlier quarter. The latest adjusted earnings were 91 cents, up from 79 cents. Revenue rose 5% to $122.4 million. 

Three analysts surveyed by FactSet produced a consensus estimate of GAAP earnings of 37 cents a share.

The numbers “speak to a company that is gaining some nice growth momentum into fiscal year 2021,” Wedbush analyst Daniel Ives wrote in a commentary. 

“We believe the Chef acquisition could be a potential game changer for Progress over the next few years, as the strategy and financial upside around this deal ... start to play out. The acquisition of Chef looks like a deal that was well executed and is in PRGS's wheelhouse.”

Ives lifted his price target to $55 from $45 and affirmed his outperform rating.

Benchmark analysts boosted their price target to $55 from $43, affirming a buy rating. 

The earnings were solid, but the company’s mixed outlook “likely reflects the uncertain macro environment,” they said in a commentary cited by Bloomberg.

That outlook “may stall the stock’s advance,” but Benchmark is still bullish long-term. With an attractive valuation, “we remain buyers of the stock.”