PEGASYSTEMS INC (PEGA) Fundamental Analysis & Valuation

NASDAQ:PEGA • US7055731035

Current stock price

40.2 USD
-1.96 (-4.65%)
Last:

This PEGA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. PEGA Profitability Analysis

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 each 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 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M -200M 400M

1.2 Ratios

  • PEGA's Return On Assets of 24.11% is amongst the best of the industry. PEGA outperforms 97.48% of its industry peers.
  • Looking at the Return On Equity, with a value of 49.97%, PEGA belongs to the top of the industry, outperforming 95.68% of the companies in the same industry.
  • The Return On Invested Capital of PEGA (22.12%) is better than 94.96% of its industry peers.
  • PEGA had an Average Return On Invested Capital over the past 3 years of 15.39%. This is above the industry average of 10.92%.
  • The 3 year average ROIC (15.39%) for PEGA is below the current ROIC(22.12%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 24.11%
ROE 49.97%
ROIC 22.12%
ROA(3y)11.4%
ROA(5y)0.96%
ROE(3y)28.69%
ROE(5y)-38.66%
ROIC(3y)15.39%
ROIC(5y)N/A
PEGA Yearly ROA, ROE, ROICPEGA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 -100 -200

1.3 Margins

  • PEGA has a better Profit Margin (22.54%) than 89.57% of its industry peers.
  • The Operating Margin of PEGA (16.29%) is better than 83.81% of its industry peers.
  • Looking at the Gross Margin, with a value of 75.86%, PEGA is in the better half of the industry, outperforming 69.06% of the companies in the same industry.
  • PEGA's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 16.29%
PM (TTM) 22.54%
GM 75.86%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.74%
GM growth 5Y1.78%
PEGA Yearly Profit, Operating, Gross MarginsPEGA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40 60

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ROAROEROICOperating and Profit MarginShow most profitable peers

9

2. PEGA Health Analysis

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 less shares outstanding
  • The number of shares outstanding for PEGA has been increased compared to 5 years ago.
  • PEGA has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
PEGA Yearly Shares OutstandingPEGA Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50M 100M 150M
PEGA Yearly Total Debt VS Total AssetsPEGA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B

2.2 Solvency

  • An Altman-Z score of 7.28 indicates that PEGA is not in any danger for bankruptcy at the moment.
  • With an excellent Altman-Z score value of 7.28, PEGA belongs to the best of the industry, outperforming 85.61% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 7.28
ROIC/WACC2.06
WACC10.75%
PEGA Yearly LT Debt VS Equity VS FCFPEGA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M 400M 600M

2.3 Liquidity

  • A Current Ratio of 1.33 indicates that PEGA should not have too much problems paying its short term obligations.
  • With a Current ratio value of 1.33, PEGA perfoms like the industry average, outperforming 41.73% of the companies in the same industry.
  • PEGA has a Quick Ratio of 1.33. This is a normal value and indicates that PEGA is financially healthy and should not expect problems in meeting its short term obligations.
  • PEGA's Quick ratio of 1.33 is in line compared to the rest of the industry. PEGA outperforms 42.81% of its industry peers.
  • PEGA does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
Industry RankSector Rank
Current Ratio 1.33
Quick Ratio 1.33
PEGA Yearly Current Assets VS Current LiabilitesPEGA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. PEGA Growth Analysis

3.1 Past

  • PEGA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.33%, which is quite impressive.
  • PEGA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 82.73% yearly.
  • The Revenue has grown by 16.61% in the past year. This is quite good.
  • Measured over the past years, PEGA shows a quite strong growth in Revenue. The Revenue has been growing by 11.40% on average per year.
EPS 1Y (TTM)40.33%
EPS 3Y82.73%
EPS 5YN/A
EPS Q2Q%-5.59%
Revenue 1Y (TTM)16.61%
Revenue growth 3Y9.83%
Revenue growth 5Y11.4%
Sales Q2Q%2.75%

3.2 Future

  • PEGA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.38% yearly.
  • Based on estimates for the next years, PEGA will show a small growth in Revenue. The Revenue will grow by 6.34% on average per year.
EPS Next Y31.48%
EPS Next 2Y20.76%
EPS Next 3Y14.75%
EPS Next 5Y1.38%
Revenue Next Year14.28%
Revenue Next 2Y13.08%
Revenue Next 3Y12.78%
Revenue Next 5Y6.34%

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.
PEGA Yearly Revenue VS EstimatesPEGA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 1B 2B 3B
PEGA Yearly EPS VS EstimatesPEGA Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 0 1 2 3

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7

4. PEGA Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 19.05, which indicates a rather expensive current valuation of PEGA.
  • Based on the Price/Earnings ratio, PEGA is valued a bit cheaper than the industry average as 69.78% of the companies are valued more expensively.
  • PEGA's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.23.
  • With a Price/Forward Earnings ratio of 14.52, PEGA is valued correctly.
  • PEGA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 74.46% of the companies in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 22.51. PEGA is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 19.05
Fwd PE 14.52
PEGA Price Earnings VS Forward Price EarningsPEGA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PEGA indicates a somewhat cheap valuation: PEGA is cheaper than 71.94% of the companies listed in the same industry.
  • 80.94% of the companies in the same industry are more expensive than PEGA, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 13.85
EV/EBITDA 21.76
PEGA Per share dataPEGA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8 10

4.3 Compensation for Growth

  • PEGA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • The excellent profitability rating of PEGA may justify a higher PE ratio.
  • PEGA's earnings are expected to grow with 14.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.61
PEG (5Y)N/A
EPS Next 2Y20.76%
EPS Next 3Y14.75%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

4

5. PEGA Dividend Analysis

5.1 Amount

  • PEGA has a yearly dividend return of 0.28%, which is pretty low.
  • The stock price of PEGA dropped by -32.47% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
  • PEGA's Dividend Yield is rather good when compared to the industry average which is at 0.64. PEGA pays more dividend than 89.21% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.90, PEGA's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.28%

5.2 History

  • The dividend of PEGA decreases each year by -5.53%.
  • PEGA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-5.53%
Div Incr Years0
Div Non Decr Years0
PEGA Yearly Dividends per sharePEGA Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.02 0.04 0.06 0.08

5.3 Sustainability

  • 3.92% of the earnings are spent on dividend by PEGA. This is a low number and sustainable payout ratio.
DP3.92%
EPS Next 2Y20.76%
EPS Next 3Y14.75%
PEGA Yearly Income VS Free CF VS DividendPEGA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M -200M 400M
PEGA Dividend Payout.PEGA Dividend Payout, showing the Payout Ratio.PEGA Dividend Payout.PayoutRetained Earnings

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PEGA Fundamentals: All Metrics, Ratios and Statistics

PEGASYSTEMS INC

NASDAQ:PEGA (3/27/2026, 10:00:43 AM)

40.2

-1.96 (-4.65%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-10
Earnings (Next)04-20
Inst Owners60.87%
Inst Owner Change3.3%
Ins Owners46.35%
Ins Owner Change-1.53%
Market Cap6.80B
Revenue(TTM)1.75B
Net Income(TTM)393.44M
Analysts84.21
Price Target58.97 (46.69%)
Short Float %7.58%
Short Ratio2.89
Dividend
Industry RankSector Rank
Dividend Yield 0.28%
Yearly Dividend0.09
Dividend Growth(5Y)-5.53%
DP3.92%
Div Incr Years0
Div Non Decr Years0
Ex-Date01-02
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)24.35%
Min EPS beat(2)1.37%
Max EPS beat(2)47.32%
EPS beat(4)4
Avg EPS beat(4)68.65%
Min EPS beat(4)1.37%
Max EPS beat(4)206.69%
EPS beat(8)8
Avg EPS beat(8)50.18%
EPS beat(12)10
Avg EPS beat(12)741.26%
EPS beat(16)12
Avg EPS beat(16)569.07%
Revenue beat(2)2
Avg Revenue beat(2)4.16%
Min Revenue beat(2)0.03%
Max Revenue beat(2)8.29%
Revenue beat(4)4
Avg Revenue beat(4)10.77%
Min Revenue beat(4)0.03%
Max Revenue beat(4)30.76%
Revenue beat(8)6
Avg Revenue beat(8)5.8%
Revenue beat(12)8
Avg Revenue beat(12)4.54%
Revenue beat(16)10
Avg Revenue beat(16)2.8%
PT rev (1m)-18.76%
PT rev (3m)-17.56%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.79%
EPS NY rev (1m)22.41%
EPS NY rev (3m)21.37%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.92%
Revenue NY rev (1m)0.5%
Revenue NY rev (3m)7.2%
Valuation
Industry RankSector Rank
PE 19.05
Fwd PE 14.52
P/S 3.89
P/FCF 13.85
P/OCF 13.45
P/B 8.63
P/tB 9.64
EV/EBITDA 21.76
EPS(TTM)2.11
EY5.25%
EPS(NY)2.77
Fwd EY6.88%
FCF(TTM)2.9
FCFY7.22%
OCF(TTM)2.99
OCFY7.43%
SpS10.33
BVpS4.66
TBVpS4.17
PEG (NY)0.61
PEG (5Y)N/A
Graham Number14.87
Profitability
Industry RankSector Rank
ROA 24.11%
ROE 49.97%
ROCE 31.81%
ROIC 22.12%
ROICexc 42.23%
ROICexgc 51.29%
OM 16.29%
PM (TTM) 22.54%
GM 75.86%
FCFM 28.11%
ROA(3y)11.4%
ROA(5y)0.96%
ROE(3y)28.69%
ROE(5y)-38.66%
ROIC(3y)15.39%
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)22.13%
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc 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 3Y1.74%
GM growth 5Y1.78%
F-Score9
Asset Turnover1.07
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Debt/EBITDA 0
Cap/Depr 105.88%
Cap/Sales 0.83%
Interest Coverage 162.14
Cash Conversion 169.49%
Profit Quality 124.73%
Current Ratio 1.33
Quick Ratio 1.33
Altman-Z 7.28
F-Score9
WACC10.75%
ROIC/WACC2.06
Cap/Depr(3y)79.75%
Cap/Depr(5y)92.85%
Cap/Sales(3y)0.84%
Cap/Sales(5y)1.21%
Profit Quality(3y)254.05%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)40.33%
EPS 3Y82.73%
EPS 5YN/A
EPS Q2Q%-5.59%
EPS Next Y31.48%
EPS Next 2Y20.76%
EPS Next 3Y14.75%
EPS Next 5Y1.38%
Revenue 1Y (TTM)16.61%
Revenue growth 3Y9.83%
Revenue growth 5Y11.4%
Sales Q2Q%2.75%
Revenue Next Year14.28%
Revenue Next 2Y13.08%
Revenue Next 3Y12.78%
Revenue Next 5Y6.34%
EBIT growth 1Y76.85%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year28.19%
EBIT Next 3Y19.95%
EBIT Next 5Y-0.44%
FCF growth 1Y45.09%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y46.05%
OCF growth 3Y182.96%
OCF growth 5YN/A

PEGASYSTEMS INC / PEGA Fundamental Analysis FAQ

What is the ChartMill fundamental rating of PEGASYSTEMS INC (PEGA) stock?

ChartMill assigns a fundamental rating of 7 / 10 to PEGA.


What is the valuation status for PEGA stock?

ChartMill assigns a valuation rating of 7 / 10 to PEGASYSTEMS INC (PEGA). This can be considered as Undervalued.


Can you provide the profitability details for PEGASYSTEMS INC?

PEGASYSTEMS INC (PEGA) has a profitability rating of 8 / 10.


What is the valuation of PEGASYSTEMS INC based on its PE and PB ratios?

The Price/Earnings (PE) ratio for PEGASYSTEMS INC (PEGA) is 19.05 and the Price/Book (PB) ratio is 8.63.


What is the expected EPS growth for PEGASYSTEMS INC (PEGA) stock?

The Earnings per Share (EPS) of PEGASYSTEMS INC (PEGA) is expected to grow by 31.48% in the next year.