Roper Represents Decent Risk/Reward for Long-Term Shareholders

Despite being range-bound since the summer of 2020, wide-moat-rated Roper Technologies' stock represents a decent risk/reward opportunity for long-term shareholders, in our view. The shares are currently trading about 19% below our fair value estimate of $530 per share. The points of resistance in the stock seem twofold. First, the capital markets appear to not be taking kindly to leveraged deals where the benefits accrue many years in the future. Second, others contend that Roper’s historical organic growth profile underearned its potential. We’re less concerned about the first contention, which we think is fallout related to rising rates and macroeconomic uncertainty. On the second point, we think the market fails to appreciate a few things.