On the four Ms, Roper Technologies earns 66 for management and 82 for moat. The management score rests on a return on invested capital of 5.6% and a gross margin of 69.2% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.47x equity. A wide moat alongside strong management is a combination worth understanding before the price matters at all.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 10.2% a year, the rate measured from the filings. The exit multiple assumed is 20.5x. That produces an intrinsic value of $321.92, a 10-CAP price of $256.96 and a payback time price of $326.75, with the value zone set at the highest of the three, $326.75. Today's price of $362.59 sits 11% above it.
A wonderful business at the wrong price is still the wrong price. Roper Technologies scores well on the business and poorly on the entry point, which is the most common shape in a long bull market.
| Price | $362.59 |
| Market cap | $36.6B |
| P/E ratio | 15.1x |
| Return on invested capital | 5.6% |
| Gross margin | 69.2% |
| Debt to equity | 0.47x |
| Free cash flow yield | 5.2% |
| Growth rate used | 10.2% |
| Growth rate measured | 10.0% |
| Exit multiple assumed | 20.5x |
| Company | Moat | Buy price |
| Ansys Inc. (ANSS) | 94 | $130.99 |
| Constellation Software Inc (CNSWF) | 86 | $1,999.72 |
| Autodesk (ADSK) | 84 | $200.26 |
| Veeva Systems (VEEV) | 100 | $157.74 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Roper Technologies rather than accepting ours.