Roper Technologies, Inc.ROPNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics Financials Growth Insiders

DCF Valuation

DCF Valuation Summary

Buy

Fair Value: $459.77 per share(market-calibrated)

+27.3%

Upside to Fair Value

Current

$361.27

Pure Model

$473.59

Fair Value

$459.77

Bull Case

$593.71

Bear Case

$372.69

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

0.50%

Calibrated Growth

1.81%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $473.59.

What's Driving This Ratingfor ROP

✓

CapEx already efficient

CapEx at 0.90% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 28.95% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

⚠

Analyst growth decelerates sharply

Revenue growth drops from 7.79% in Year 1 to 2.25% by Year 5 (per analyst consensus). This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 175bps below the model's 2.25%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 81.52% indicates efficient cash generation. FCF reaches $3.7B by Year 10 (31.30% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.93

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.67%

Cost of Debt

Pre-tax Cost of Debt2.53%

Tax Rate20.65%

After-tax Cost of Debt2.01%

Equity Weight (E/V)80.63%

Debt Weight (D/V)19.37%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (80.63% × 8.67%) + (19.37% × 2.01%)

= 7.38%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$8.5B	$9.8B	$10.5B	$11.0B	$11.7B
EBIT	$2.5B	$2.8B	$3.0B	$3.2B	$3.4B
Tax	$509M	$584M	$627M	$656M	$701M
NOPAT	$2.0B	$2.2B	$2.4B	$2.5B	$2.7B
+ Depreciation	$805M	$923M	$991M	$1.0B	$1.1B
- Capex	$76M	$88M	$94M	$98M	$105M
- Δ NWC	$62M	$71M	$23M	$24M	$26M
Free Cash Flow	$2.6B	$3.0B	$3.3B	$3.4B	$3.7B
Discount Factor	0.931	0.808	0.700	0.607	0.491
Present Value	$2.4B	$2.4B	$2.3B	$2.1B	$1.8B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$3.7B

Terminal Growth Rate2.25%

WACC7.38%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$73.1B

PV of Terminal Value$35.9B

Exit Multiple Method

Year 10 EBITDA$4.5B

Exit Multiple (EV/EBITDA)18.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$81.0B

PV of Terminal Value$39.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$22.0B

PV of Terminal Value$35.9B

Enterprise Value$57.8B

(-) Net Debt$9.0B

Equity Value$48.8B

Shares Outstanding107M

Price per Share$455.52

Exit Multiple Method

PV of Projected FCFs$22.0B

PV of Terminal Value$39.8B

Enterprise Value$61.7B

(-) Net Debt$9.0B

Equity Value$52.7B

Shares Outstanding107M

Price per Share$491.65

Pure Model Fair Value

$473.59

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
5.38%	$614.39	$650.00	$696.99	$761.83	$857.11
6.38%	$516.69	$537.34	$562.98	$595.69	$638.84
7.38%	$444.91	$457.98	$473.59	$492.56	$516.14
8.38%	$388.91	$397.68	$407.88	$419.90	$434.26
9.38%	$343.42	$349.57	$356.59	$364.67	$374.06

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$372.69

3.2% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.16

Base Case

$473.59

31.1% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 0.93

Bull Case

$593.71

64.3% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 0.79

Key Assumptions & Drivers• Industrials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth7.79%

Year 3 Revenue Growth7.78%

Year 5 Revenue Growth2.25%

Year 7 Revenue Growth2.25%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin28.95%

Tax Rate20.65%

Historical Capex / Rev0.90%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (Industrials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance