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Roper Technologies, Inc. (ROP) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Roper Technologies, Inc. (ROP)

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Intrinsic Value (DCF)

Current$414.25
→
Intrinsic$368.11
-11%
$229.63$368.11$631.30
Market implies 13% growth for 5 years
ROP appears fairly valued — current price aligns with our DCF estimate.
At $414, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (11%).
Range: Bear $230 → Bull $631. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →7%9%11%13%
8%$453$499$549$603
10%$302$334$368$405
12%$218$242$268$295
14%$165$184$204$226

Bull Case

  • Bull case ($631) offers 52% upside at 13% growth, 9% discount
  • Conservative 11% growth assumption is achievable based on track record

Bear Case

  • Bear case ($230) implies 45% downside at 9% growth, 12% discount
  • Price reflects 13% growth expectations vs 11% historical — high bar to clear
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5-Year Free Cash Flow Projection

Year 1$2.58B
Year 2$2.85B
Year 3$3.16B
Year 4$3.50B
Year 5$3.87B
Terminal$56.97B

📐 Model Inputs

Growth Rate10.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.33BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ROP stock undervalued or overvalued?
🔴 OVERVALUED

ROP trades at $414.25 vs. our DCF-derived intrinsic value of $368.11, implying -16% downside. Using a 10.0% WACC and 10.7% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($543.55) suggests limited upside.

What is ROP's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.33B, projected at 10.7% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.48B net debt and dividing by 0.11B shares: Bear $240.09 | Base $368.11 | Bull $543.55. Current price $414.25 implies -16% to base case.

How is ROP's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 10.7% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($47.24B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.3x.