Investing.com — Jefferies named this construction software provider its preferred mid-cap pick among vertical software companies, seeing scope for faster organic revenue growth next year and a 6-percentage-point increase in operating margin to 25%, despite higher interest rates.
The brokerage recommended owning Procore (NYSE:PCOR), design software maker Autodesk and diversified software company Roper Technologies, all rated “buy”, in a recent note.
Procore ranked first, with a price target of $105 against a Nov. 9 closing price of $76.46. Its shares have risen 5.1% so far this year.
Jefferies said construction was among the least digitised industries and that Procore addressed a $15 trillion market, 86% of which was outside the United States. The company is growing more than 15 percentage points faster than its core end market, where growth is slightly negative to flat.
Procore has nearly 3 million active users and more than 66,000 active AI users, for whom it is beginning to charge, Jefferies said. The brokerage also cited new management under Chief Executive Ajei Gopal and saw scope for the valuation to rise from about six times 2028 revenue, compared with its historical average of seven to eight times.
Autodesk had a Jefferies price target of $325, against a Nov. 9 close of $263.35. Its shares have fallen 11% so far this year.
Jefferies expects Autodesk to deliver durable growth of 10% or more, saying its proprietary physical-design data is difficult for AI language models to replicate. The stock trades at about 18 times expected 2027 free cash flow, near its lowest level, the brokerage said.
Roper Technologies had a price target of $540, compared with a Nov. 9 close of $471.64. Its shares have gained 6% so far this year.
Jefferies said Roper combines mid-single-digit organic growth with adjusted EBITDA margins above 40% across 29 market-leading niche businesses. The stock trades at about 18 times 2028 enterprise value to free cash flow, 30% below its historical average.
Roper has spent $50 million on acquisitions this year, compared with $5 billion available for acquisitions over the next 12 months. Federal-level volatility at Deltek and high copper prices at Neptune have weighed on organic growth, Jefferies said.
