Stock Analysis on Net

Roper Technologies Inc. (NASDAQ:ROP)

This company has been moved to the archive! The financial data has not been updated since November 2, 2023.

Present Value of Free Cash Flow to Equity (FCFE) 

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In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to equity (FCFE) is generally described as cash flows available to the equity holder after payments to debt holders and after allowing for expenditures to maintain the company asset base.


Intrinsic Stock Value (Valuation Summary)

Roper Technologies Inc., free cash flow to equity (FCFE) forecast

US$ in thousands, except per share data

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Year Value FCFEt or Terminal value (TVt) Calculation Present value at 14.30%
01 FCFE0 -737,600
1 FCFE1 = -737,600 × (1 + 0.00%)
2 FCFE2 = × (1 + 0.00%)
3 FCFE3 = × (1 + 0.00%)
4 FCFE4 = × (1 + 0.00%)
5 FCFE5 = × (1 + 0.00%)
5 Terminal value (TV5) = × (1 + 0.00%) ÷ (14.30%0.00%)
Intrinsic value of Roper Technologies Inc. common stock
 
Intrinsic value of Roper Technologies Inc. common stock (per share) $—
Current share price $494.05

Based on: 10-K (reporting date: 2022-12-31).

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.


Required Rate of Return (r)

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Assumptions
Rate of return on LT Treasury Composite1 RF 4.67%
Expected rate of return on market portfolio2 E(RM) 13.79%
Systematic risk of Roper Technologies Inc. common stock βROP 1.06
 
Required rate of return on Roper Technologies Inc. common stock3 rROP 14.30%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 rROP = RF + βROP [E(RM) – RF]
= 4.67% + 1.06 [13.79%4.67%]
= 14.30%


FCFE Growth Rate (g)

FCFE growth rate (g) implied by PRAT model

Roper Technologies Inc., PRAT model

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Average Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in thousands)
Dividends declared 269,600 243,200 219,800 197,600 175,600
Net earnings 4,544,700 1,152,600 949,700 1,767,900 944,400
Net revenues 5,371,800 5,777,800 5,527,100 5,366,800 5,191,200
Total assets 26,980,800 23,713,900 24,024,800 18,108,900 15,249,500
Stockholders’ equity 16,037,800 11,563,800 10,479,800 9,491,900 7,738,500
Financial Ratios
Retention rate1 0.94 0.79 0.77 0.89 0.81
Profit margin2 84.60% 19.95% 17.18% 32.94% 18.19%
Asset turnover3 0.20 0.24 0.23 0.30 0.34
Financial leverage4 1.68 2.05 2.29 1.91 1.97
Averages
Retention rate 0.84
Profit margin 22.07%
Asset turnover 0.26
Financial leverage 1.98
 
FCFE growth rate (g)5 0.00%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

1 Retention rate = (Net earnings – Dividends declared) ÷ Net earnings
= (4,544,700269,600) ÷ 4,544,700
= 0.94

2 Profit margin = 100 × Net earnings ÷ Net revenues
= 100 × 4,544,700 ÷ 5,371,800
= 84.60%

3 Asset turnover = Net revenues ÷ Total assets
= 5,371,800 ÷ 26,980,800
= 0.20

4 Financial leverage = Total assets ÷ Stockholders’ equity
= 26,980,800 ÷ 16,037,800
= 1.68

5 g = Retention rate × Profit margin × Asset turnover × Financial leverage
= 0.84 × 22.07% × 0.26 × 1.98
= 0.00%


FCFE growth rate (g) forecast

Roper Technologies Inc., H-model

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Year Value gt
1 g1 0.00%
2 g2 0.00%
3 g3 0.00%
4 g4 0.00%
5 and thereafter g5 0.00%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5g1) × (2 – 1) ÷ (5 – 1)
= 0.00% + (0.00%0.00%) × (2 – 1) ÷ (5 – 1)
= 0.00%

g3 = g1 + (g5g1) × (3 – 1) ÷ (5 – 1)
= 0.00% + (0.00%0.00%) × (3 – 1) ÷ (5 – 1)
= 0.00%

g4 = g1 + (g5g1) × (4 – 1) ÷ (5 – 1)
= 0.00% + (0.00%0.00%) × (4 – 1) ÷ (5 – 1)
= 0.00%