PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis
NASDAQ:PEGA - Nasdaq - US7055731035 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to PEGA. PEGA was compared to 282 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 decent growth rate and is not valued too expensively.
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.
1.2 Ratios
PEGA's Return On Assets of 14.88% is amongst the best of the industry. PEGA outperforms 90.78% of its industry peers.
The Return On Equity of PEGA (32.18%) is better than 91.84% of its industry peers.
With an excellent Return On Invested Capital value of 27.18%, PEGA belongs to the best of the industry, outperforming 95.74% 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
Looking at the Profit Margin, with a value of 11.98%, PEGA is in the better half of the industry, outperforming 77.66% of the companies in the same industry.
PEGA has a Operating Margin of 16.78%. This is amongst the best in the industry. PEGA outperforms 84.40% of its industry peers.
PEGA has a better Gross Margin (75.74%) than 68.79% 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PEGA 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.
Compared to 1 year ago, PEGA has an improved debt to assets ratio.
2.2 Solvency
PEGA has an Altman-Z score of 9.48. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.48, PEGA belongs to the best of the industry, outperforming 82.98% 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 | 9.48 |
ROIC/WACC2.59
WACC10.48%
2.3 Liquidity
A Current Ratio of 1.39 indicates that PEGA should not have too much problems paying 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.
With a Quick ratio value of 1.39, PEGA perfoms like the industry average, outperforming 44.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
PEGA shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.15%.
PEGA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 156.54% yearly.
Looking at the last year, PEGA shows a quite strong growth in Revenue. The Revenue has grown by 14.29% in the last year.
The Revenue has been growing by 10.44% on average over the past years. This is quite good.
EPS 1Y (TTM)-8.15%
EPS 3Y156.54%
EPS 5YN/A
EPS Q2Q%59.38%
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 7.78% on average per year.
The Revenue is expected to grow by 4.90% on average over the next years.
EPS Next Y-10.31%
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%
EPS Next 5Y7.78%
Revenue Next Year13.8%
Revenue Next 2Y10.11%
Revenue Next 3Y8.67%
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
With a Price/Earnings ratio of 20.33, PEGA is valued on the expensive side.
Based on the Price/Earnings ratio, PEGA is valued cheaply inside the industry as 80.14% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.52, PEGA is valued a bit cheaper.
PEGA is valuated rather expensively with a Price/Forward Earnings ratio of 24.78.
70.57% of the companies in the same industry are more expensive than PEGA, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 35.58. PEGA is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 24.78 |
4.2 Price Multiples
76.95% of the companies in the same industry are more expensive than PEGA, based on the Enterprise Value to EBITDA ratio.
78.72% of the companies in the same industry are more expensive than PEGA, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.78 | ||
| EV/EBITDA | 27.27 |
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%
5. Dividend
5.1 Amount
With a yearly dividend of 0.12%, PEGA is not a good candidate for dividend investing.
PEGA's Dividend Yield is rather good when compared to the industry average which is at 24.07. PEGA pays more dividend than 89.72% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, 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 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
5.3 Sustainability
PEGA pays out 5.22% of its income as dividend. This is a sustainable payout ratio.
DP5.22%
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%
50.43
+0.63 (+1.27%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners50.07%
Inst Owner Change0.07%
Ins Owners46.97%
Ins Owner Change-1.07%
Market Cap8.59B
Analysts82
Price TargetN/A
Short Float %N/A
Short Ratio2.02
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)-47.83%
EPS NQ rev (3m)-54.09%
EPS NY rev (1m)-44.41%
EPS NY rev (3m)-37.64%
Revenue NQ rev (1m)2.39%
Revenue NQ rev (3m)-0.47%
Revenue NY rev (1m)2.82%
Revenue NY rev (3m)5.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 24.78 | ||
| P/S | 5.23 | ||
| P/FCF | 23.78 | ||
| P/OCF | 23.2 | ||
| P/B | 14.04 | ||
| P/tB | 16.29 | ||
| EV/EBITDA | 27.27 |
EPS(TTM)2.48
EY4.92%
EPS(NY)2.04
Fwd EY4.04%
FCF(TTM)2.12
FCFY4.21%
OCF(TTM)2.17
OCFY4.31%
SpS9.65
BVpS3.59
TBVpS3.1
PEG (NY)N/A
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 | 9.48 |
F-Score9
WACC10.48%
ROIC/WACC2.59
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)-8.15%
EPS 3Y156.54%
EPS 5YN/A
EPS Q2Q%59.38%
EPS Next Y-10.31%
EPS Next 2Y-3.71%
EPS Next 3Y-1.79%
EPS Next 5Y7.78%
Revenue 1Y (TTM)14.29%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%44.07%
Revenue Next Year13.8%
Revenue Next 2Y10.11%
Revenue Next 3Y8.67%
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