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PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis

NASDAQ:PEGA - Nasdaq - US7055731035 - Common Stock - Currency: USD

98.84  -2.37 (-2.34%)

After market: 98.35 -0.49 (-0.5%)

Fundamental Rating

6

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 has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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6

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.
PEGA Yearly Net Income VS EBIT VS OCF VS FCFPEGA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M -200M

1.2 Ratios

PEGA's Return On Assets of 14.88% is amongst the best of the industry. PEGA outperforms 90.85% of its industry peers.
With an excellent Return On Equity value of 32.18%, PEGA belongs to the best of the industry, outperforming 91.90% of the companies in the same industry.
With an excellent Return On Invested Capital value of 27.18%, PEGA belongs to the best of the industry, outperforming 95.77% of the companies in the same industry.
Industry RankSector 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
PEGA Yearly ROA, ROE, ROICPEGA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 -50 -100 -150 -200 -250

1.3 Margins

PEGA's Profit Margin of 11.98% is fine compared to the rest of the industry. PEGA outperforms 77.82% of its industry peers.
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 Gross Margin of 75.74%. This is in the better half of the industry: PEGA outperforms 69.01% of its industry peers.
In the last couple of years the Gross Margin of PEGA has grown nicely.
Industry RankSector 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%
PEGA Yearly Profit, Operating, Gross MarginsPEGA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40 60

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7

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PEGA is creating value.
Compared to 1 year ago, PEGA has more shares outstanding
The number of shares outstanding for PEGA has been increased compared to 5 years ago.
The debt/assets ratio for PEGA has been reduced compared to a year ago.
PEGA Yearly Shares OutstandingPEGA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M 80M
PEGA Yearly Total Debt VS Total AssetsPEGA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

2.2 Solvency

PEGA has an Altman-Z score of 9.47. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.47, PEGA belongs to the best of the industry, outperforming 84.15% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 9.47
ROIC/WACC3.16
WACC8.59%
PEGA Yearly LT Debt VS Equity VS FCFPEGA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M 400M 600M

2.3 Liquidity

A Current Ratio of 1.39 indicates that PEGA should not have too much problems paying its short term obligations.
PEGA's Current ratio of 1.39 is in line compared to the rest of the industry. PEGA outperforms 44.01% of its industry peers.
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 RankSector Rank
Current Ratio 1.39
Quick Ratio 1.39
PEGA Yearly Current Assets VS Current LiabilitesPEGA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 50.00% over the past year.
Measured over the past years, PEGA shows a very strong growth in Earnings Per Share. The EPS has been growing by 184.70% on average per year.
The Revenue has grown by 14.29% in the past year. This is quite good.
PEGA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.44% yearly.
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

PEGA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.25% yearly.
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.
PEGA Yearly Revenue VS EstimatesPEGA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 500M 1B 1.5B 2B 2.5B
PEGA Yearly EPS VS EstimatesPEGA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 0 1 2 3 4 5

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4

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 24.40, the valuation of PEGA can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of PEGA indicates a somewhat cheap valuation: PEGA is cheaper than 74.30% of the companies listed in the same industry.
PEGA's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.32.
Based on the Price/Forward Earnings ratio of 26.94, the valuation of PEGA can be described as expensive.
Based on the Price/Forward Earnings ratio, PEGA is valued a bit cheaper than the industry average as 65.49% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.13, PEGA is valued a bit more expensive.
Industry RankSector Rank
PE 24.4
Fwd PE 26.94
PEGA Price Earnings VS Forward Price EarningsPEGA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, PEGA is valued a bit cheaper than 76.41% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PEGA is valued a bit cheaper than the industry average as 77.46% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 23.43
EV/EBITDA 27.2
PEGA Per share dataPEGA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15

4.3 Compensation for Growth

The 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.
PEG (NY)1.35
PEG (5Y)N/A
EPS Next 2Y10.58%
EPS Next 3Y6.83%

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4

5. Dividend

5.1 Amount

With a yearly dividend of 0.12%, PEGA is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 16.43, PEGA pays a better dividend. On top of this PEGA pays more dividend than 90.14% of the companies listed in the same industry.
With a Dividend Yield of 0.12, PEGA pays less dividend than the S&P500 average, which is at 2.40.
Industry RankSector Rank
Dividend Yield 0.12%

5.2 History

The dividend of PEGA decreases each year by -0.03%.
PEGA has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-0.03%
Div Incr Years0
Div Non Decr Years0
PEGA Yearly Dividends per sharePEGA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.02 0.04 0.06 0.08 0.1

5.3 Sustainability

PEGA pays out 5.22% of its income as dividend. This is a sustainable payout ratio.
DP5.22%
EPS Next 2Y10.58%
EPS Next 3Y6.83%
PEGA Yearly Income VS Free CF VS DividendPEGA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M -200M
PEGA Dividend Payout.PEGA Dividend Payout, showing the Payout Ratio.PEGA Dividend Payout.PayoutRetained Earnings

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PEGASYSTEMS INC

NASDAQ:PEGA (6/13/2025, 8:00:01 PM)

After market: 98.35 -0.49 (-0.5%)

98.84

-2.37 (-2.34%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)04-22 2025-04-22/amc
Earnings (Next)07-22 2025-07-22/amc
Inst Owners50.07%
Inst Owner Change1.99%
Ins Owners46.97%
Ins Owner Change-1.55%
Market Cap8.46B
Analysts81
Price Target104.18 (5.4%)
Short Float %3.49%
Short Ratio1.37
Dividend
Industry RankSector Rank
Dividend Yield 0.12%
Yearly Dividend0.12
Dividend Growth(5Y)-0.03%
DP5.22%
Div Incr Years0
Div Non Decr Years0
Ex-Date04-01 2025-04-01 (0.03)
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 RankSector Rank
PE 24.4
Fwd PE 26.94
P/S 5.15
P/FCF 23.43
P/OCF 22.86
P/B 13.84
P/tB 16.05
EV/EBITDA 27.2
EPS(TTM)4.05
EY4.1%
EPS(NY)3.67
Fwd EY3.71%
FCF(TTM)4.22
FCFY4.27%
OCF(TTM)4.32
OCFY4.37%
SpS19.19
BVpS7.14
TBVpS6.16
PEG (NY)1.35
PEG (5Y)N/A
Profitability
Industry RankSector 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 RankSector 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 9.47
F-Score9
WACC8.59%
ROIC/WACC3.16
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