PEGASYSTEMS INC (NASDAQ:PEGA) – A Strong Contender for CANSLIM Investors

PEGASYSTEMS INC (NASDAQ:PEGA) stands out as a potential candidate for investors following the CANSLIM strategy. The company’s strong earnings growth, high relative strength, and solid fundamentals align well with the criteria outlined by William O’Neil’s methodology. Below, we examine why PEGA fits the CANSLIM framework.

Key CANSLIM Criteria Met by PEGA

• C – Current Earnings Growth: PEGA reported a quarterly EPS growth of 218.75% year-over-year, far exceeding the CANSLIM benchmark of 20%. Revenue growth also impressed at 44.07%, indicating strong business momentum.
• A – Annual Earnings Growth: The company’s 3-year EPS growth rate is an exceptional 184.70%, well above the 25% minimum suggested by O’Neil.
• N – New Highs & Innovation: PEGA operates in enterprise AI decisioning and workflow automation, a high-growth sector. The stock has shown strong price performance, trading near its 52-week high.
• S – Supply & Demand: With no debt (Debt/Equity of 0.0) and a manageable institutional ownership of 48.11%, PEGA maintains a favorable supply-demand balance.
• L – Market Leadership: PEGA’s relative strength score of 94.95 places it in the top tier of outperformers, a key trait for CANSLIM stocks.
• I – Institutional Sponsorship: While institutional ownership is moderate, the lack of excessive concentration leaves room for further institutional accumulation.
• M – Market Direction: The S&P 500’s short-term uptrend supports a favorable environment for growth stocks like PEGA.

Technical & Fundamental Snapshot

• Technical Strength: PEGA’s chart shows a strong uptrend, with both short-term and long-term trends positive. The stock has outperformed 94% of the market over the past year.
• Fundamental Health: The company scores well on profitability (ROE of 32.18%) and solvency, with no debt and strong cash flow generation.

For a deeper look, review the full technical analysis and fundamental report.

Our CANSLIM High Growth screener lists more stocks meeting these criteria and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should always conduct your own analysis before making investment decisions.