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PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis

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

99.635  -3.66 (-3.54%)

Fundamental Rating

6

Overall PEGA gets a fundamental rating of 6 out of 10. We evaluated PEGA against 283 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.
In multiple years PEGA reported negative net income over the last 5 years.
PEGA had a positive operating cash flow in 4 of the past 5 years.
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 90.81% of its industry peers.
PEGA's Return On Equity of 32.18% is amongst the best of the industry. PEGA outperforms 91.52% of its industry peers.
PEGA's Return On Invested Capital of 27.18% is amongst the best of the industry. PEGA outperforms 96.47% of its industry peers.
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

With a decent Profit Margin value of 11.98%, PEGA is doing good in the industry, outperforming 77.03% of the companies in the same industry.
PEGA's Operating Margin of 16.78% is amongst the best of the industry. PEGA outperforms 84.45% of its industry peers.
PEGA has a better Gross Margin (75.74%) than 70.32% of its industry peers.
PEGA's Gross Margin has improved in the last couple of years.
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
PEGA has more shares outstanding than it did 5 years ago.
PEGA has a better debt/assets ratio than last year.
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

An Altman-Z score of 9.79 indicates that PEGA is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 9.79, PEGA belongs to the top of the industry, outperforming 84.10% 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 9.79
ROIC/WACC2.56
WACC10.63%
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

PEGA has a Current 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 Current ratio (1.39) which is in line with 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.
The Quick ratio of PEGA (1.39) is comparable to the rest of the industry.
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

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
Looking at the last year, PEGA shows a quite strong growth in Revenue. The Revenue has grown by 14.29% in the last year.
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 1.06% yearly.
The Revenue is expected to grow by 5.21% on average over the next years.
EPS Next Y18.05%
EPS Next 2Y10.58%
EPS Next 3Y6.83%
EPS Next 5Y1.06%
Revenue Next Year10.68%
Revenue Next 2Y8.22%
Revenue Next 3Y7.95%
Revenue Next 5Y5.21%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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

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4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 24.60 indicates a rather expensive valuation of PEGA.
Compared to the rest of the industry, the Price/Earnings ratio of PEGA indicates a somewhat cheap valuation: PEGA is cheaper than 72.44% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of PEGA to the average of the S&P500 Index (26.60), we can say PEGA is valued inline with the index average.
With a Price/Forward Earnings ratio of 27.16, PEGA can be considered very expensive at the moment.
66.78% of the companies in the same industry are more expensive than PEGA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.43, PEGA is valued a bit more expensive.
Industry RankSector Rank
PE 24.6
Fwd PE 27.16
PEGA Price Earnings VS Forward Price EarningsPEGA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

75.97% of the companies in the same industry are more expensive than PEGA, based on the Enterprise Value to EBITDA ratio.
PEGA's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 77.03% of the companies in the same industry.
Industry RankSector Rank
P/FCF 23.62
EV/EBITDA 28.51
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.
PEGA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.36
PEG (5Y)N/A
EPS Next 2Y10.58%
EPS Next 3Y6.83%

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5

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 14.22. PEGA pays more dividend than 89.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, PEGA's dividend is way lower than the S&P500 average.
Industry RankSector 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.
PEGA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-0.03%
Div Incr Years0
Div Non Decr Years15
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 (5/21/2025, 3:30:09 PM)

99.635

-3.66 (-3.54%)

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 Owners48.11%
Inst Owner Change2.85%
Ins Owners47.16%
Ins Owner Change-1.14%
Market Cap8.53B
Analysts81
Price Target104.18 (4.56%)
Short Float %3.99%
Short Ratio1.79
Dividend
Industry RankSector Rank
Dividend Yield 0.12%
Yearly Dividend0.12
Dividend Growth(5Y)-0.03%
DP5.22%
Div Incr Years0
Div Non Decr Years15
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)-4.39%
PT rev (3m)-2.48%
EPS NQ rev (1m)-35.47%
EPS NQ rev (3m)-35.75%
EPS NY rev (1m)12.2%
EPS NY rev (3m)8.21%
Revenue NQ rev (1m)-6.06%
Revenue NQ rev (3m)-5.65%
Revenue NY rev (1m)2.58%
Revenue NY rev (3m)3.47%
Valuation
Industry RankSector Rank
PE 24.6
Fwd PE 27.16
P/S 5.19
P/FCF 23.62
P/OCF 23.04
P/B 13.95
P/tB 16.18
EV/EBITDA 28.51
EPS(TTM)4.05
EY4.06%
EPS(NY)3.67
Fwd EY3.68%
FCF(TTM)4.22
FCFY4.23%
OCF(TTM)4.32
OCFY4.34%
SpS19.19
BVpS7.14
TBVpS6.16
PEG (NY)1.36
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 9.79
F-Score9
WACC10.63%
ROIC/WACC2.56
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 5Y1.06%
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 5Y5.21%
EBIT growth 1Y103.41%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year24.65%
EBIT Next 3Y17.47%
EBIT Next 5Y20.79%
FCF growth 1Y928.55%
FCF growth 3Y127.83%
FCF growth 5YN/A
OCF growth 1Y391.38%
OCF growth 3Y106.83%
OCF growth 5YN/A