PEGASYSTEMS INC (PEGA)
US7055731035 - Common Stock
PEGA gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 277 industry peers in the Software industry. Both the profitability and the financial health of PEGA get a neutral evaluation. Nothing too spectacular is happening here. PEGA is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings could make PEGA a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
PEGA had positive earnings in the past year.
PEGA had a positive operating cash flow in the past year.
PEGA had negative earnings in 4 of the past 5 years.
In multiple years PEGA reported negative operating cash flow during the last 5 years.
1.2 Ratios
PEGA's Return On Assets of 5.06% is fine compared to the rest of the industry. PEGA outperforms 79.71% of its industry peers.
PEGA's Return On Equity of 19.59% is amongst the best of the industry. PEGA outperforms 89.13% of its industry peers.
The Return On Invested Capital of PEGA (20.60%) is better than 95.65% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.06% | ||
| ROE | 19.59% | ||
| ROIC | 20.6% |
ROA(3y)-8.31%
ROA(5y)-7.59%
ROE(3y)-86.73%
ROE(5y)-57.66%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
PEGA has a better Profit Margin (5.32%) than 74.64% of its industry peers.
PEGA's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 9.43%, PEGA belongs to the top of the industry, outperforming 81.88% of the companies in the same industry.
PEGA's Gross Margin of 73.89% is fine compared to the rest of the industry. PEGA outperforms 64.49% of its industry peers.
In the last couple of years the Gross Margin of PEGA has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.43% | ||
| PM (TTM) | 5.32% | ||
| GM | 73.89% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5Y31.83%
GM growth 3Y1.95%
GM growth 5Y2.15%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so PEGA is creating value.
The number of shares outstanding for PEGA has been increased compared to 1 year ago.
PEGA has more shares outstanding than it did 5 years ago.
The debt/assets ratio for PEGA has been reduced compared to a year ago.
2.2 Solvency
PEGA has an Altman-Z score of 4.10. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.10, PEGA is doing good in the industry, outperforming 62.68% of the companies in the same industry.
PEGA has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 1.54 | ||
| Altman-Z | 4.1 |
ROIC/WACC2.19
WACC9.4%
2.3 Liquidity
A Current Ratio of 1.01 indicates that PEGA should not have too much problems paying its short term obligations.
PEGA has a worse Current ratio (1.01) than 76.81% of its industry peers.
PEGA has a Quick Ratio of 1.01. This is a normal value and indicates that PEGA is financially healthy and should not expect problems in meeting its short term obligations.
PEGA has a Quick ratio of 1.01. This is in the lower half of the industry: PEGA underperforms 75.72% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
PEGA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 718.18%, which is quite impressive.
PEGA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.80% yearly.
PEGA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.44%.
PEGA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.95% yearly.
EPS 1Y (TTM)718.18%
EPS 3YN/A
EPS 5Y30.8%
EPS growth Q2Q108.7%
Revenue 1Y (TTM)13.44%
Revenue growth 3Y12.08%
Revenue growth 5Y9.95%
Revenue growth Q2Q1.44%
3.2 Future
PEGA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.30% yearly.
Based on estimates for the next years, PEGA will show a quite strong growth in Revenue. The Revenue will grow by 11.14% on average per year.
EPS Next Y14.8%
EPS Next 2Y15.14%
EPS Next 3Y15.19%
EPS Next 5Y16.3%
Revenue Next Year9.29%
Revenue Next 2Y8.99%
Revenue Next 3Y9.74%
Revenue Next 5Y11.14%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 23.29, which indicates a rather expensive current valuation of PEGA.
Based on the Price/Earnings ratio, PEGA is valued cheaper than 82.25% of the companies in the same industry.
PEGA is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 19.36, which indicates a rather expensive current valuation of PEGA.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PEGA indicates a rather cheap valuation: PEGA is cheaper than 81.52% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, PEGA is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.29 | ||
| Fwd PE | 19.36 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PEGA is valued a bit cheaper than the industry average as 75.72% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, PEGA is valued cheaply inside the industry as 88.77% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.5 | ||
| EV/EBITDA | 31.86 |
4.3 Compensation for Growth
PEGA's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of PEGA may justify a higher PE ratio.
PEGA's earnings are expected to grow with 15.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.57
PEG (5Y)0.76
EPS Next 2Y15.14%
EPS Next 3Y15.19%
5. Dividend
5.1 Amount
PEGA has a yearly dividend return of 0.19%, which is pretty low.
PEGA's Dividend Yield is rather good when compared to the industry average which is at 12.31. PEGA pays more dividend than 89.86% of the companies in the same industry.
With a Dividend Yield of 0.19, PEGA pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.19% |
5.2 History
The dividend of PEGA decreases each year by -0.03%.
PEGA has been paying a dividend for at least 10 years, so it has a reliable track record.
PEGA has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)-0.03%
Div Incr Years0
Div Non Decr Years15
5.3 Sustainability
PEGA pays out 13.05% of its income as dividend. This is a sustainable payout ratio.
DP13.05%
EPS Next 2Y15.14%
EPS Next 3Y15.19%
PEGASYSTEMS INC
NASDAQ:PEGA (5/17/2024, 7:19:19 PM)
After market: 62.88 0 (0%)62.88
-0.4 (-0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap5.35B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.19% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.29 | ||
| Fwd PE | 19.36 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.57
PEG (5Y)0.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.06% | ||
| ROE | 19.59% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.43% | ||
| PM (TTM) | 5.32% | ||
| GM | 73.89% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.01 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)718.18%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y14.8%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)13.44%
Revenue growth 3Y12.08%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y