Progress Software Corporation Common Stock (DE) (PRGS)

FairStock Score: 71/100 — STEADY

Key Financials

Strengths

• Generates $248 million in annual free cash flow (21.5% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 18.3% above cost of capital
• FairStock composite score of 71/100 places it in the top tier across value, quality, and momentum factors

Concerns

• High leverage at 2.76x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.4 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Progress Software Corporation Common Stock (DE) is a micro-cap technology company valued at $1.1 billion. The business generates $988 million in annual revenue with a 2.3% net margin and $248 million in free cash flow. From a quality standpoint, Progress shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 0.4 warrants caution. On valuation, the stock is attractively valued at 14.1x earnings, with trades above its Graham Number with a negative 20% margin. Growth dynamics show revenue growing at 4.1% and profit growth of 108.4%. Our composite FairStock Score of 71/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Progress's consistent 18% ROE at just 14x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $248 million in annual free cash flow (21.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 2.8x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer