Progress Software (PRGS) shares are in focus after the company announced a relocation and expansion of its Bengaluru office, highlighting India’s growing role in its AI work and customer facing operations.

The Bengaluru expansion comes at a time when Progress Software’s share price return has weakened, with a 29.6% decline over 90 days and a 46.9% drop in 1 year total shareholder return. This is despite a 6.7% 7 day share price rebound that hints at improving short term sentiment.

If this AI driven story has your attention, it can be useful to widen your search and check out 73 profitable AI stocks that aren't just burning cash

With Progress Software shares down sharply over the past year and trading below some valuation estimates, a key question is whether this AI-focused expansion story represents an opportunity or whether the market already reflects expectations for future growth.

Most Popular Narrative: 40.8% Undervalued

At a last close of $30.07 versus a widely followed fair value narrative of $50.83, Progress Software is framed as materially discounted, with that gap hinging on how AI and acquisitions play out.

The successful integration of ShareFile has significantly boosted ARR, revenue, and expense savings, which could indicate strong future revenue growth and improved net margins due to operational efficiencies. The strategic focus on SaaS acquisitions, exemplified by ShareFile, allows Progress Software to potentially increase recurring revenue, enhancing revenue predictability and stability over time.

Want to see what sits behind that valuation gap? The narrative leans on measured top line expansion, steady margins, and a richer future earnings multiple. Curious which specific forecasts make those numbers add up?

Result: Fair Value of $50.83 (UNDERVALUED)

However, there is still the risk that heavier reliance on SaaS acquisitions and the ongoing ShareFile integration could raise costs or pressure margins, which would test that undervalued thesis.

Next Steps

The mix of AI ambition and recent share price pressure leaves plenty to think about, so move quickly, review the data, and weigh both the 3 key rewards and 2 important warning signs

Looking for more investment ideas?

Do not stop with a single stock story. Broaden your watchlist with other concrete ideas so you are not kicking yourself later for missing clear opportunities.

• Spot potential value candidates early by scanning 58 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect them yet.
• Strengthen the quality of your portfolio foundations by zeroing in on companies from the solid balance sheet and fundamentals stocks screener (41 results) that can better handle business shocks.
• Hunt for underfollowed opportunities by searching the screener containing 23 high quality undiscovered gems where strong fundamentals meet lower market attention.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.