PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis
NASDAQ:PEGA - US7055731035 - Common Stock
54.21 USD
+0.6 (+1.12%)
54.21 USD
0 (0%)
Overall PEGA gets a fundamental rating of 5 out of 10. We evaluated PEGA against 281 industry peers in the Software industry. PEGA has an excellent financial health rating, but there are some minor concerns on its profitability. PEGA is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
PEGA had positive earnings in the past year.
In the past year PEGA had a positive cash flow from operations.
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 16.63% is amongst the best of the industry. PEGA outperforms 92.55% of its industry peers.
With an excellent Return On Equity value of 35.26%, PEGA belongs to the best of the industry, outperforming 93.62% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 27.09%, PEGA belongs to the top of the industry, outperforming 95.74% of the companies in the same industry.
| Industry Rank | Sector 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
1.3 Margins
PEGA's Profit Margin of 13.14% is fine compared to the rest of the industry. PEGA outperforms 76.24% of its industry peers.
PEGA's Operating Margin of 16.66% is amongst the best of the industry. PEGA outperforms 83.69% of its industry peers.
The Gross Margin of PEGA (75.47%) is better 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 | 16.66% | ||
| 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%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), PEGA is creating value.
The number of shares outstanding for PEGA has been increased compared to 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 10.34. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
PEGA has a better Altman-Z score (10.34) than 87.94% of its industry peers.
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 | 10.34 |
ROIC/WACC2.47
WACC10.95%
2.3 Liquidity
A Current Ratio of 1.41 indicates that PEGA should not have too much problems paying its short term obligations.
PEGA has a Current ratio (1.41) which is comparable to the rest of the 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 46.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.41 | ||
| Quick Ratio | 1.41 |
3. Growth
3.1 Past
PEGA shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.22%.
The Earnings Per Share has been growing by 156.54% 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 12.47% in the last year.
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
The Earnings Per Share is expected to decrease by -2.56% on average over the next years.
PEGA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.82% yearly.
EPS Next Y-7.58%
EPS Next 2Y-0.96%
EPS Next 3Y0.87%
EPS Next 5Y-2.56%
Revenue Next Year15.59%
Revenue Next 2Y10.89%
Revenue Next 3Y9.36%
Revenue Next 5Y5.82%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 24.20, PEGA is valued on the expensive side.
Based on the Price/Earnings ratio, PEGA is valued a bit cheaper than the industry average as 72.34% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.08, PEGA is valued at the same level.
A Price/Forward Earnings ratio of 25.18 indicates a quite expensive valuation of PEGA.
Based on the Price/Forward Earnings ratio, PEGA is valued a bit cheaper than the industry average as 69.15% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.72, PEGA is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.2 | ||
| Fwd PE | 25.18 |
4.2 Price Multiples
73.76% 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 79.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.83 | ||
| EV/EBITDA | 29.39 |
4.3 Compensation for Growth
PEGA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-0.96%
EPS Next 3Y0.87%
5. Dividend
5.1 Amount
With a yearly dividend of 0.11%, 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 53.28. PEGA pays more dividend than 89.72% of the companies in the same industry.
With a Dividend Yield of 0.11, PEGA pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
5.2 History
The dividend of PEGA decreases each year by -12.97%.
PEGA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-12.97%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
4.67% of the earnings are spent on dividend by PEGA. This is a low number and sustainable payout ratio.
The Dividend Rate of PEGA has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP4.67%
EPS Next 2Y-0.96%
EPS Next 3Y0.87%
54.21
+0.6 (+1.12%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners50.35%
Inst Owner Change112.81%
Ins Owners46.92%
Ins Owner Change-1.25%
Market Cap9.27B
Analysts82
Price Target64.4 (18.8%)
Short Float %5.72%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
Yearly Dividend0.06
Dividend Growth(5Y)-12.97%
DP4.67%
Div Incr Years0
Div Non Decr Years0
Ex-Date
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)17.37%
PT rev (3m)-38.18%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-53.25%
EPS NY rev (1m)3.05%
EPS NY rev (3m)-42.72%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)-0.59%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)4.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.2 | ||
| Fwd PE | 25.18 | ||
| P/S | 5.53 | ||
| P/FCF | 22.83 | ||
| P/OCF | 22.28 | ||
| P/B | 14.85 | ||
| P/tB | 17.16 | ||
| EV/EBITDA | 29.39 |
EPS(TTM)2.24
EY4.13%
EPS(NY)2.15
Fwd EY3.97%
FCF(TTM)2.37
FCFY4.38%
OCF(TTM)2.43
OCFY4.49%
SpS9.8
BVpS3.65
TBVpS3.16
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 10.34 |
F-Score9
WACC10.95%
ROIC/WACC2.47
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-7.58%
EPS Next 2Y-0.96%
EPS Next 3Y0.87%
EPS Next 5Y-2.56%
Revenue 1Y (TTM)12.47%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%9.5%
Revenue Next Year15.59%
Revenue Next 2Y10.89%
Revenue Next 3Y9.36%
Revenue Next 5Y5.82%
EBIT growth 1Y48.31%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year53.54%
EBIT Next 3Y23.62%
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