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

PEGASYSTEMS INC (NASDAQ:PEGA) has been identified as a potential candidate for investors following the CANSLIM strategy. The company’s strong earnings growth, high relative strength, and solid fundamentals make it stand out in the software industry. Below, we examine why PEGA fits the CANSLIM criteria.

Why PEGA Fits the CANSLIM Strategy

• C – Current Earnings & Sales Growth: PEGA reported a 59.4% year-over-year EPS growth and 44.1% revenue growth in the most recent quarter, well above the CANSLIM minimum thresholds of 20% and 25%, respectively.
• A – Annual Earnings Growth: The company’s 3-year EPS growth rate of 156.5% demonstrates sustained profitability, far exceeding the 25% benchmark.
• N – New Highs & Innovation: PEGA specializes in AI-driven workflow automation, a high-growth sector, and its stock is trading near the upper end of its 52-week range.
• S – Supply & Demand: With zero debt and strong institutional interest (50.1% ownership), PEGA maintains a healthy balance sheet.
• L – Market Leadership: PEGA’s relative strength of 93.6 means it outperforms nearly 94% of all stocks, a key trait for CANSLIM stocks.
• I – Institutional Sponsorship: Institutional ownership is moderate, leaving room for further accumulation.
• M – Market Direction: The S&P 500 is in a positive long-term trend, supporting a favorable environment for growth stocks.

Technical & Fundamental Highlights

• Technical Rating (9/10): PEGA’s chart shows a strong uptrend, with recent consolidation suggesting a potential breakout. The stock is trading above key moving averages, reinforcing bullish momentum. View the full technical report here.
• Fundamental Rating (5/10): While PEGA has excellent profitability metrics (32.2% ROE) and financial health, its valuation is slightly elevated. However, its growth trajectory justifies the premium. See the full fundamental analysis.

Our CANSLIM High Growth screener lists more high-growth stocks that fit this strategy.

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.