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

PEGASYSTEMS INC (NASDAQ:PEGA) stands out as a compelling 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. Below, we examine why PEGA fits the CANSLIM model.

Key CANSLIM Criteria Met by PEGA

• C – Current Earnings & Sales Growth:

  • Quarterly EPS growth (Q2Q): 218.75%
  • Quarterly revenue growth (Q2Q): 44.07%
    Both figures exceed the CANSLIM minimum thresholds of 20% for EPS and 25% for sales, indicating strong momentum.

• A – Annual Earnings Growth:

  • 3-year EPS CAGR: 184.70%
  • Return on Equity (ROE): 32.18%
    PEGA’s long-term earnings growth and high ROE demonstrate consistent profitability and efficient capital use.

• N – New Highs & Market Leadership:

  • PEGA’s stock price is trading near its 52-week high, reflecting positive market sentiment.
  • Relative Strength (CRS): 95.3, meaning it outperforms 95% of all stocks—a hallmark of market leadership.

• S – Supply & Demand:

  • Debt/Equity ratio: 0.0, indicating no debt burden.
  • Institutional ownership: 50.07%, suggesting healthy institutional interest without being overly saturated.

• L – Leader in Its Industry:
  PEGA ranks in the top 13% of its software industry peers based on price performance.

• I – Institutional Sponsorship:
  Moderate institutional ownership suggests room for further institutional accumulation.

• M – Market Direction:
  The S&P 500’s positive long-term and short-term trends support a favorable environment for growth stocks like PEGA.

Technical & Fundamental Snapshot

• Technical Rating: 9/10 – Strong uptrend, high relative strength, and increasing volume support further upside potential.
• Fundamental Rating: 6/10 – Excellent financial health and profitability, though future EPS growth expectations are modest.

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

Our CANSLIM High Growth screener lists more high-growth stocks 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.