Will Strength in Application Software Drive Roper's Growth?

Roper Technologies, Inc. ROP is benefiting from strong momentum in its Application Software segment, driven by strength across its Aderant, Deltek, Vertafore and PowerPlan businesses. It is witnessing strength in the acute healthcare, property and casualty insurance, and legal markets. In the fourth quarter of 2025, the Application Software segment contributed more than half of the company’s revenues, accounting for 56.3% of the total business. In the same quarter, total revenues from this segment rose 10% year over year while its organic revenues grew 4%.

The growing adoption of SaaS solutions and continued GenAI innovation are key catalysts to Aderant’s growth. Solid demand for SaaS solutions in the private sector bodes well for the Deltek business. The Vertafore business is gaining from excellent enterprise delivery capabilities to the largest customers in the market, which has also resulted in strong annual recurring revenue (ARR) growth. Strong customer retention and adoption of new SaaS solutions are aiding the PowerPlan business. Solid momentum in the ILLUMIA business, driven by strong market execution, also bodes well for the segment.

Backed by strong business performance, Roper expects organic revenues from the Application Software segment to rise in the mid-single digits in 2026. The segment is expected to remain the company’s primary business catalyst in the near term, supported by steady recurring revenues.

Segment Snapshot of ROP’s Peers

Among its major peers, Autodesk, Inc.’s ADSK performance is gaining from new business growth, steady subscription renewal rates and strong competitive performance. Higher demand for its cloud-based products, mobile solutions and design suites also bodes well for Autodesk. Autodesk’s aggressive push into cloud infrastructure and AI integration demands substantial capital deployment for data centers, computing resources and specialized talent acquisition.

Roper's other peer, Atlassian Corp.’s TEAM AI-powered capabilities, are seeing rapid adoption. Atlassia’s AI-powered Rovo platform and automation tools are driving significant growth in premium and enterprise editions, demonstrating high demand for AI-enhanced workflows. Atlassian’s latest focus on adding generative AI features to some of its collaboration software is likely to drive the top line over the long run.

ROP’s Price Performance, Valuation & Estimates

Shares of Roper have lost 1.4% in the past month compared with the industry’s decline of 7.2%.

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From a valuation standpoint, ROP is trading at a forward price-to-earnings ratio of 16.73X compared with the industry’s average of 18.92X. Roper carries a Value Score of C.

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The Zacks Consensus Estimate for ROP’s 2026 earnings has increased over the past 60 days.

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Roper currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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