PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis
NASDAQ:PEGA - Nasdaq - US7055731035 - Common Stock - Currency: USD
Overall PEGA gets a fundamental rating of 6 out of 10. We evaluated PEGA against 284 industry peers in the Software industry. PEGA is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. PEGA is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year PEGA was profitable.
PEGA had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: PEGA reported negative net income in multiple years.
Of the past 5 years PEGA 4 years had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 14.88%, PEGA belongs to the best of the industry, outperforming 90.85% of the companies in the same industry.
PEGA has a better Return On Equity (32.18%) than 91.90% of its industry peers.
Looking at the Return On Invested Capital, with a value of 27.18%, PEGA belongs to the top of the industry, outperforming 95.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 32.18% | ||
| ROIC | 27.18% |
ROA(3y)-5.12%
ROA(5y)-4.63%
ROE(3y)-76.04%
ROE(5y)-50.92%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 11.98%, PEGA is doing good in the industry, outperforming 77.82% of the companies in the same industry.
Looking at the Operating Margin, with a value of 16.78%, PEGA belongs to the top of the industry, outperforming 84.51% of the companies in the same industry.
PEGA has a better Gross Margin (75.74%) than 69.01% of its industry peers.
In the last couple of years the Gross Margin of PEGA has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.78% | ||
| PM (TTM) | 11.98% | ||
| GM | 75.74% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.76%
GM growth 5Y2.29%
2. Health
2.1 Basic Checks
PEGA has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
PEGA has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, PEGA has more shares outstanding
PEGA has a better debt/assets ratio than last year.
2.2 Solvency
PEGA has an Altman-Z score of 9.63. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.63, PEGA belongs to the best of the industry, outperforming 83.45% of the companies in the same industry.
There is no outstanding debt for PEGA. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 9.63 |
ROIC/WACC3.17
WACC8.57%
2.3 Liquidity
A Current Ratio of 1.39 indicates that PEGA should not have too much problems paying its short term obligations.
The Current ratio of PEGA (1.39) is comparable to the rest of the industry.
PEGA has a Quick Ratio of 1.39. 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 1.39. This is comparable to the rest of the industry: PEGA outperforms 44.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
PEGA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 50.00%, which is quite impressive.
The Earnings Per Share has been growing by 184.70% on average over the past years. This is a very strong growth
PEGA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.29%.
Measured over the past years, PEGA shows a quite strong growth in Revenue. The Revenue has been growing by 10.44% on average per year.
EPS 1Y (TTM)50%
EPS 3Y184.7%
EPS 5YN/A
EPS Q2Q%218.75%
Revenue 1Y (TTM)14.29%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%44.07%
3.2 Future
Based on estimates for the next years, PEGA will show a small growth in Earnings Per Share. The EPS will grow by 1.25% on average per year.
PEGA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.90% yearly.
EPS Next Y18.05%
EPS Next 2Y10.58%
EPS Next 3Y6.83%
EPS Next 5Y1.25%
Revenue Next Year10.68%
Revenue Next 2Y8.22%
Revenue Next 3Y7.95%
Revenue Next 5Y4.9%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PEGA is valuated rather expensively with a Price/Earnings ratio of 24.96.
PEGA's Price/Earnings ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 74.30% of the companies in the same industry.
PEGA's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.34.
With a Price/Forward Earnings ratio of 27.55, PEGA can be considered very expensive at the moment.
PEGA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 64.08% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of PEGA to the average of the S&P500 Index (22.19), we can say PEGA is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.96 | ||
| Fwd PE | 27.55 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PEGA indicates a somewhat cheap valuation: PEGA is cheaper than 75.70% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, PEGA is valued a bit cheaper than the industry average as 78.17% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.96 | ||
| EV/EBITDA | 27.86 |
4.3 Compensation for Growth
PEGA's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEGA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.38
PEG (5Y)N/A
EPS Next 2Y10.58%
EPS Next 3Y6.83%
5. Dividend
5.1 Amount
PEGA has a yearly dividend return of 0.12%, which is pretty low.
PEGA's Dividend Yield is rather good when compared to the industry average which is at 16.43. PEGA pays more dividend than 90.14% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, PEGA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.12% |
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.
Dividend Growth(5Y)-0.03%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
5.22% of the earnings are spent on dividend by PEGA. This is a low number and sustainable payout ratio.
DP5.22%
EPS Next 2Y10.58%
EPS Next 3Y6.83%
101.07
+0.4 (+0.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners50.07%
Inst Owner Change1.99%
Ins Owners46.97%
Ins Owner Change-1.55%
Market Cap8.65B
Analysts81
Price Target104.18 (3.08%)
Short Float %5.97%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.12% |
Yearly Dividend0.12
Dividend Growth(5Y)-0.03%
DP5.22%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)107.35%
Min EPS beat(2)8.02%
Max EPS beat(2)206.69%
EPS beat(4)4
Avg EPS beat(4)80.75%
Min EPS beat(4)6.36%
Max EPS beat(4)206.69%
EPS beat(8)7
Avg EPS beat(8)1108.23%
EPS beat(12)8
Avg EPS beat(12)742.58%
EPS beat(16)10
Avg EPS beat(16)572.2%
Revenue beat(2)2
Avg Revenue beat(2)16.5%
Min Revenue beat(2)2.23%
Max Revenue beat(2)30.76%
Revenue beat(4)3
Avg Revenue beat(4)9.49%
Min Revenue beat(4)-1.97%
Max Revenue beat(4)30.76%
Revenue beat(8)5
Avg Revenue beat(8)6.38%
Revenue beat(12)6
Avg Revenue beat(12)2.55%
Revenue beat(16)8
Avg Revenue beat(16)1.9%
PT rev (1m)0%
PT rev (3m)-4.39%
EPS NQ rev (1m)36.35%
EPS NQ rev (3m)-13.89%
EPS NY rev (1m)0%
EPS NY rev (3m)10.65%
Revenue NQ rev (1m)3.48%
Revenue NQ rev (3m)-2.64%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.96 | ||
| Fwd PE | 27.55 | ||
| P/S | 5.27 | ||
| P/FCF | 23.96 | ||
| P/OCF | 23.38 | ||
| P/B | 14.15 | ||
| P/tB | 16.41 | ||
| EV/EBITDA | 27.86 |
EPS(TTM)4.05
EY4.01%
EPS(NY)3.67
Fwd EY3.63%
FCF(TTM)4.22
FCFY4.17%
OCF(TTM)4.32
OCFY4.28%
SpS19.19
BVpS7.14
TBVpS6.16
PEG (NY)1.38
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 32.18% | ||
| ROCE | 38.67% | ||
| ROIC | 27.18% | ||
| ROICexc | 56.81% | ||
| ROICexgc | 75.47% | ||
| OM | 16.78% | ||
| PM (TTM) | 11.98% | ||
| GM | 75.74% | ||
| FCFM | 21.98% |
ROA(3y)-5.12%
ROA(5y)-4.63%
ROE(3y)-76.04%
ROE(5y)-50.92%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.76%
GM growth 5Y2.29%
F-Score9
Asset Turnover1.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 54.58% | ||
| Cap/Sales | 0.55% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 126.66% | ||
| Profit Quality | 183.51% | ||
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 9.63 |
F-Score9
WACC8.57%
ROIC/WACC3.17
Cap/Depr(3y)107.22%
Cap/Depr(5y)95.53%
Cap/Sales(3y)1.46%
Cap/Sales(5y)1.55%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)50%
EPS 3Y184.7%
EPS 5YN/A
EPS Q2Q%218.75%
EPS Next Y18.05%
EPS Next 2Y10.58%
EPS Next 3Y6.83%
EPS Next 5Y1.25%
Revenue 1Y (TTM)14.29%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%44.07%
Revenue Next Year10.68%
Revenue Next 2Y8.22%
Revenue Next 3Y7.95%
Revenue Next 5Y4.9%
EBIT growth 1Y103.41%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year33.23%
EBIT Next 3Y17.84%
EBIT Next 5Y6.1%
FCF growth 1Y928.55%
FCF growth 3Y127.83%
FCF growth 5YN/A
OCF growth 1Y391.38%
OCF growth 3Y106.83%
OCF growth 5YN/A