Progress Software Corporation (NASDAQ:PRGS) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 4.0% to hit US$175m. Progress Software also reported a statutory profit of US$0.37, which was an impressive 42% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

After the latest results, the seven analysts covering Progress Software are now predicting revenues of US$729.6m in 2024. If met, this would reflect a reasonable 2.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 19% to US$2.02. In the lead-up to this report, the analysts had been modelling revenues of US$726.6m and earnings per share (EPS) of US$2.00 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$62.86, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Progress Software at US$67.00 per share, while the most bearish prices it at US$55.00. This is a very narrow spread of estimates, implying either that Progress Software is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Progress Software's revenue growth is expected to slow, with the forecast 5.1% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that Progress Software is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Progress Software going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Progress Software .

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