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Progress Software stock currently sits in an uncomfortable middle ground in terms of valuation, with shares having fallen sharply over the past three years while the broader checks are still cheap rather than clearly broken.
Over the last three years, Progress Software has fallen 34.2%, putting pressure on the current share price to justify even a Neutral valuation rating.
Domo’s agreed $400 million cash acquisition may support the long-term equity story if integration and capital allocation are well received, but it increases execution risk and raises questions about how quickly any benefits will materialize in earnings and cash flow.
In Simply Wall St’s more comprehensive checks, Progress Software receives a rating of 5 out of 6, suggesting the stock is still considered relatively cheap and not fully valued.
The question now is whether this high valuation and weak 3-year stock performance together indicate an underappreciated value for Progress Software or a stock that is roughly where it should be.
Progress Software returned -25.5% last year. See how this compares to the rest of the software industry.
Table of Contents
Is the price of Progress software reasonable relative to income?
The P/E ratio is a useful way to think about Progress Software, as earnings remain a key factor in how investors are likely to value the stock. Progress Software trades on a P/E ratio of 17.4x, compared to a software industry average of 27.8x and a broader peer group average of 42.3x, putting the stock at a significant discount when making simple comparisons.
Progress Software’s estimated fair P/E ratio, which is intended to reflect its mix of growth, margins, size and risk, is 19.1x. That’s just slightly above the current 17.4x, suggesting the shares are neither particularly cheap nor expensive relative to what the company’s profile might justify. Although the recent $400 million Domo deal gives investors more moving parts to evaluate, the current P/E ratio is still pretty much in line with this bespoke fair value indicator.
Overall, Progress Software’s P/E ratio suggests that the stock is trading at around a fair valuation relative to its earnings profile.
Price-earnings ratio NasdaqGS:PRGS as of July 2026
See what the numbers say at this price – find out in our valuation breakdown.
The Progress Software Narrative: What Would Justify Today’s Price?
Simply Wall St Narratives pick up where the Progress Software valuation puzzle leaves off by laying out, based on the narratives posted on the community site, what mix of future growth, margins and earnings would be required for the stock to be worth significantly more or significantly less than today’s price. Everyone views Progress Software’s fair value as a thesis that you can track over time, rather than a one-time snapshot.
One of the top community narratives about Progress Software: 16% undervalued
“While Progress Software’s integration of ShareFile and acquisition of Nuclia suggests the opportunity to leverage cutting-edge GenAI and SaaS across its portfolio, potentially improving customer retention and supporting revenue growth…”
Read one of the top stories on Progress Software
Do you think there is more to the Progress Software story? Visit our community to see what others are saying!
The conclusion
Progress Software is now trading at earnings multiples that seem about right for its risk and growth profile, so the simple valuation gain is probably behind you. On a broader basis, the stock still appears attractively valued, but this gap will only matter if the Domo acquisition, integration efforts and capital allocation decisions result in reliable earnings and cash flows over time. The real swing factor here is whether this perceived discount reflects mispricing or an appropriate execution risk penalty, particularly given how quickly management can convert current deals into sustained returns on invested capital.
This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include: PRGS.
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https://finance.yahoo.com/markets/stocks/articles/progress-software-prgs-stock-looks-200654983.html
