Roper Technologies (ROP) Q1 Earnings: Is A Beat In Store?

We expect Roper Technologies, Inc (NYSE:ROP) to beat expectations when it reports first-quarter 2017 earnings on Apr 28.

Why a Likely Positive Surprise?

Our proven model shows that Roper Technologies is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: Roper’s Earnings ESP is +1.00%. This is because the company’s Most Accurate estimate is $2.02 while the Zacks Consensus Estimate is pegged lower at $2. A favourable ESP serves as a meaningful and leading indicator of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Roper currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 have a significantly higher chance of beating earnings estimates.

Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.

The combination of Roper Technologies Zacks Rank #3 and +1.00% ESP makes us reasonably optimistic of an earnings beat.

What is Driving the Better-than-Expected Earnings?

Roper’s unique asset light business model helps it to remain less dependent on large-scale production equipment. The asset light business model helps Roper to generate strong cash flow quickly.

Furthermore, Roper holds a dominant position in most of the markets where it operates. The company has an optimum mix of highly engineered, niche-oriented products, which help it to gain market share. We believe that large project wins and strong order trends will drive the top line in the long run.

We note that Roper has delivered an average positive surprise of 0.92% in the trailing four quarters. Moreover, the stock has outperformed the Zacks Manufacturing - General Industrial industry on a year-to-date basis. While the industry gained 10.9%, the stock returned 18.3%.

However, the company’s business has been affected by weakness in the oil and gas sector. Sluggish global macroeconomic conditions also remain concerns.

For the first quarter of 2017, Roper Technologies expects adjusted earnings per share in a range of $1.92 - $2.00.

Other Stocks to Consider

Here are some companies you may consider as our proven model shows they too have the right combination of elements to post an earnings beat this quarter:

Avid Technology (NASDAQ:AVID) has an Earnings ESP of +160.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DragonWave (TO:DRWI) has an Earnings ESP of +8.82% and a Zacks Rank #2.

AMTEK (NYSE:AME) with an Earnings ESP of +1.79% and a Zacks Rank #2.

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