Shares in Progress Software (PRGS) dipped in spite of a healthy earnings beat in the last quarter for the AI-powered infrastructure software company.
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Fiscal third-quarter 2024 earnings surpassed analysts’ expectations with earnings per share of $1.33 against a forecast of $1.21, as operating margins expanded by 200 basis points to 41%.
Revenue also exceeded projections, reaching $215 million compared to around $211 million expected. Annualized Recurring Revenue, one of the key metrics reported by the firm, rose 46% year-over-year to $842 million.
“2024 was a strong year for Progress as we continue to execute on our long-term strategy to invest and innovate, acquire and integrate, and drive customer success to deliver Total Growth,” said Yogesh Gupta, CEO at Progress.
ShareFile Boosts PRGS
The company reiterated that its $875 million acquisition of ShareFile, which completed in October, is expected to boost future revenues. Previously the company said ShareFile is expected to add more than $240 million in annual revenue and more than 86,000 customers to Progress.
The ShareFile acquisition adds an AI-powered SaaS content-centric collaboration platform to the firm’s portfolio and “will contribute meaningfully to our top- and bottom-line,” added Gupta.
Nevertheless, the numbers were not sufficient to boost investor confidence as shares fell over 5% in after-hours trade. Shares had risen more than 8% in the last 12 months before this.
What is PRGS Stock Price Prediction?
Overall, Wall Street has a Moderate Buy consensus rating on PRGS, based on two Buys and two Holds in the last three months. The average PRGS price target of $74.00 implies 16.50% upside from current levels.
