Roper's Application Software Growth Picks Up: A Sign of More Upside?

Roper Technologies, Inc.’s ROP Application Software segment is benefiting from strong momentum across its Deltek, Vertafore, PowerPlan and Aderant businesses. Solid demand for its products and solutions across the acute healthcare, project-based business, and property & casualty insurance markets has been driving its performance lately. The segment’s organic revenues increased 6% on a year-over-year basis in the second quarter of 2025.

The growing adoption of SaaS solutions and continued GenAI innovation have been key catalysts to Aderant’s growth. Growing demand for Roper’s SaaS solutions in the GovCon and private sectors and cloud offerings has been proving beneficial for the Deltek business. The Vertafore business is gaining from excellent enterprise delivery capabilities to the largest customers in the market, which has also resulted in strong annual recurring revenue (ARR) growth.

Strong customer retention and adoption of new SaaS solutions are aiding the PowerPlan business. Solid momentum in ROP’s TransAct and CBORD businesses, driven by strong market execution, also bodes well for the segment. Driven by strength across its businesses, Roper expects organic revenues from the Application Software segment to increase in the mid-single digits in the second half of 2025.

Roper has also increased its total revenue outlook. For 2025, the company expects total revenues to increase approximately 13% from the year-ago level, higher than 12% expected earlier. Organic revenues are now estimated to rise 6-7% year over year.

Performance Snapshot of ROP’s Peers

Among its major peers, Rockwell Automation, Inc. ROK is benefiting from broadening its portfolio of hardware and software products, solutions and services. Rockwell's FactoryTalk Design Studio includes a copilot, which improves automation system design efficiency and is integrated into this cloud-native application, an industry first. Rockwell is expected to witness above-market organic sales growth by expanding its served markets and improving offerings that will provide it with a competitive edge.

Its another peer, Honeywell International Inc. HON has been witnessing persistent weakness in the Industrial Automation segment. Softness in the productivity solutions and services business, owing to a decrease in license and settlement payments, remains a concern for Honeywell’s segment. In second-quarter 2025, Honeywell’s Industrial Automation segment’s sales declined 5% on a year-over-year basis.

ROP’s Price Performance, Valuation and Estimates

Shares of Roper have lost 6.3% in the past year compared with the industry’s decline of 12%.

From a valuation standpoint, ROP is trading at a forward price-to-earnings ratio of 24.37X compared with the industry’s average of 26.17X. Roper carries a Value Score of D.

The Zacks Consensus Estimate for ROP’s 2025 and 2026 earnings has been on the rise over the past 60 days.

Roper currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research