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PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis

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

51.22  -2.55 (-4.75%)

After market: 51.4 +0.18 (+0.35%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to PEGA. PEGA was compared to 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

PEGA had positive earnings in the past year.
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

The Return On Assets of PEGA (16.63%) is better than 92.55% of its industry peers.
PEGA's Return On Equity of 35.26% is amongst the best of the industry. PEGA outperforms 92.20% of its industry peers.
With an excellent Return On Invested Capital value of 27.09%, PEGA belongs to the best of the industry, outperforming 96.10% of the companies in the same industry.
Industry RankSector Rank
ROA 16.63%
ROE 35.26%
ROIC 27.09%
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 has a better Profit Margin (13.14%) than 78.37% of its industry peers.
With an excellent Operating Margin value of 16.66%, PEGA belongs to the best of the industry, outperforming 84.75% of the companies in the same industry.
PEGA has a better Gross Margin (75.47%) than 68.44% of its industry peers.
PEGA's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 16.66%
PM (TTM) 13.14%
GM 75.47%
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

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.
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 50M 100M 150M
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 10.28. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 10.28, PEGA belongs to the best of the industry, outperforming 86.88% 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 10.28
ROIC/WACC2.61
WACC10.36%
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 1.41. This is a normal value and indicates that PEGA is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.41, PEGA perfoms like the industry average, outperforming 46.45% of the companies in the same industry.
A Quick Ratio of 1.41 indicates that PEGA should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.41, PEGA perfoms like the industry average, outperforming 46.45% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.41
Quick Ratio 1.41
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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4

3. Growth

3.1 Past

The earnings per share for PEGA have decreased strongly by -30.22% in the last year.
PEGA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 156.54% yearly.
PEGA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.47%.
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)-30.22%
EPS 3Y156.54%
EPS 5YN/A
EPS Q2Q%-46.15%
Revenue 1Y (TTM)12.47%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%9.5%

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 7.78% 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 Y-10.31%
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%
EPS Next 5Y7.78%
Revenue Next Year15%
Revenue Next 2Y10.53%
Revenue Next 3Y9.21%
Revenue Next 5Y4.9%

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 5

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4

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 22.87, the valuation of PEGA can be described as rather expensive.
PEGA's Price/Earnings ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 71.99% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.48. PEGA is around the same levels.
PEGA is valuated quite expensively with a Price/Forward Earnings ratio of 25.17.
Based on the Price/Forward Earnings ratio, PEGA is valued a bit cheaper than the industry average as 66.31% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of PEGA to the average of the S&P500 Index (34.04), we can say PEGA is valued slightly cheaper.
Industry RankSector Rank
PE 22.87
Fwd PE 25.17
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

Based on the Enterprise Value to EBITDA ratio, PEGA is valued a bit cheaper than the industry average as 74.47% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, PEGA is valued a bit cheaper than the industry average as 77.31% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 21.57
EV/EBITDA 29.14
PEGA Per share dataPEGA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8

4.3 Compensation for Growth

The decent profitability rating of PEGA may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%

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4

5. Dividend

5.1 Amount

PEGA has a yearly dividend return of 0.11%, which is pretty low.
PEGA's Dividend Yield is rather good when compared to the industry average which is at 35.34. PEGA pays more dividend than 89.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, PEGA's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.11%

5.2 History

The dividend of PEGA decreases each year by -12.97%.
PEGA has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-12.97%
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

5.3 Sustainability

4.67% of the earnings are spent on dividend by PEGA. This is a low number and sustainable payout ratio.
DP4.67%
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%
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 (8/8/2025, 8:00:13 PM)

After market: 51.4 +0.18 (+0.35%)

51.22

-2.55 (-4.75%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)07-22 2025-07-22/amc
Earnings (Next)10-21 2025-10-21/amc
Inst Owners50.35%
Inst Owner Change5.58%
Ins Owners46.92%
Ins Owner Change-0.97%
Market Cap8.76B
Analysts82
Price Target64.4 (25.73%)
Short Float %N/A
Short Ratio3.21
Dividend
Industry RankSector Rank
Dividend Yield 0.11%
Yearly Dividend0.06
Dividend Growth(5Y)-12.97%
DP4.67%
Div Incr Years0
Div Non Decr Years0
Ex-Date07-01 2025-07-01 (0.03)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)112.96%
Min EPS beat(2)19.23%
Max EPS beat(2)206.69%
EPS beat(4)4
Avg EPS beat(4)60.07%
Min EPS beat(4)6.36%
Max EPS beat(4)206.69%
EPS beat(8)8
Avg EPS beat(8)1119.24%
EPS beat(12)9
Avg EPS beat(12)789.6%
EPS beat(16)10
Avg EPS beat(16)559.2%
Revenue beat(2)2
Avg Revenue beat(2)17.37%
Min Revenue beat(2)3.99%
Max Revenue beat(2)30.76%
Revenue beat(4)3
Avg Revenue beat(4)8.75%
Min Revenue beat(4)-1.97%
Max Revenue beat(4)30.76%
Revenue beat(8)6
Avg Revenue beat(8)7.68%
Revenue beat(12)7
Avg Revenue beat(12)4.69%
Revenue beat(16)8
Avg Revenue beat(16)1.1%
PT rev (1m)-47.33%
PT rev (3m)-45.13%
EPS NQ rev (1m)-2.33%
EPS NQ rev (3m)-53.25%
EPS NY rev (1m)-49.63%
EPS NY rev (3m)-37.63%
Revenue NQ rev (1m)-1.17%
Revenue NQ rev (3m)-0.77%
Revenue NY rev (1m)1.35%
Revenue NY rev (3m)5.61%
Valuation
Industry RankSector Rank
PE 22.87
Fwd PE 25.17
P/S 5.23
P/FCF 21.57
P/OCF 21.06
P/B 14.03
P/tB 16.21
EV/EBITDA 29.14
EPS(TTM)2.24
EY4.37%
EPS(NY)2.04
Fwd EY3.97%
FCF(TTM)2.37
FCFY4.64%
OCF(TTM)2.43
OCFY4.75%
SpS9.8
BVpS3.65
TBVpS3.16
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 16.63%
ROE 35.26%
ROCE 38.53%
ROIC 27.09%
ROICexc 62.68%
ROICexgc 85.64%
OM 16.66%
PM (TTM) 13.14%
GM 75.47%
FCFM 24.24%
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 Turnover1.27
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Debt/EBITDA 0
Cap/Depr 65.4%
Cap/Sales 0.59%
Interest Coverage 250
Cash Conversion 141.37%
Profit Quality 184.52%
Current Ratio 1.41
Quick Ratio 1.41
Altman-Z 10.28
F-Score9
WACC10.36%
ROIC/WACC2.61
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)-30.22%
EPS 3Y156.54%
EPS 5YN/A
EPS Q2Q%-46.15%
EPS Next Y-10.31%
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%
EPS Next 5Y7.78%
Revenue 1Y (TTM)12.47%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%9.5%
Revenue Next Year15%
Revenue Next 2Y10.53%
Revenue Next 3Y9.21%
Revenue Next 5Y4.9%
EBIT growth 1Y48.31%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year33.23%
EBIT Next 3Y17.84%
EBIT Next 5Y6.1%
FCF growth 1Y291.43%
FCF growth 3Y127.83%
FCF growth 5YN/A
OCF growth 1Y194.74%
OCF growth 3Y106.83%
OCF growth 5YN/A