12:36 PM EDT, 06/26/2024 (MT Newswires) -- Progress Software ( PRGS ) remains well-positioned to carry out its long-term growth strategy as the underlying business continues to be stable, Oppenheimer said.

Analysts, including Ittai Kidron, said in a Tuesday note that the company reported mixed fiscal Q2 results, with its Q3 revenue guidance falling short of expectations, reflecting a "conservative" outlook amidst challenging economic conditions.

Oppenheimer said the company highlighted increased deal opportunities and more favorable private market valuations for potential acquisitions in H2, which could boost its stock.

"Our bullish view is predicated on our belief that Progress is well positioned to execute on its merger and acquisition-and-expand strategy to expand its business while generating stable free cash flows," the analysts said.

The company reported revenue of $175.1 million for the quarter ended May 31. Analysts surveyed by Capital IQ expected $168.4 million.

The brokerage said the revenue exceeded expectations due to strong demand across various products like OpenEdge, DevTools, Sitefinity, Loadmaster, Flowmon, and MOVEit, with annual recurring revenue growth steady at +0.9% year-over-year.

Progress received a subpoena from the US Securities and Exchange Commission in October last year asking for different records and details concerning the security flaws of its file transfer management software, MOVEit.

The analysts said that the management highlighted MOVEit's ARR increased during the quarter, indicating minimal impact from the breach incident, with total operating expenses decreased by 4% year-over-year mainly due to finishing the MarkLogic integration and operating with a lower cost structure.

Oppenheimer has an outperform rating on the stock with a price target set as $66. The analysts said that this reflects Progress Software's ( PRGS ) "mature product portfolio, stable margin profile, and high profitability while taking into account the company's limited near-term revenue upside."

Shares of Progress Software ( PRGS ) were up nearly 9% in recent trading.

Price: 53.04, Change: +4.33, Percent Change: +8.90