Pegasystems (PEGA) AI Stock Analysis

• Market Cap: $8.72B
• Dividend Yield: 0.14%
• Average Volume (3M): 1.90M
• Price to Earnings (P/E): 44.1
• Beta (1Y): 1.29
• Revenue Growth: 12.47%
• EPS Growth: 65.19%
• Country: US
• Employees: 5,443
• Sector: Technology
• Sector Strength: 97
• Industry: Software - Application
• EPS (TTM): 0.28
• Shares Outstanding: 171,080,660
• 10 Day Avg. Volume: 1,760,006
• 30 Day Avg. Volume: 1,904,311
• PEG Ratio: 0.73
• Price to Book (P/B): 6.79
• Price to Sales (P/S): 2.65
• P/FCF Ratio: 11.75
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 5.68
• Enterprise Value/Gross Profit: 7.53
• Enterprise Value/Ebitda: 28.49
• 1Y Price Target: $64.92
• Price Target Upside: 22.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 79 Outperform
• Price Target: $66.00 ▲(24.79% Upside)

Pegasystems demonstrates strong financial performance and technical momentum, supported by strategic growth in cloud services and collaborations. High valuation and macro-economic uncertainties present some risks, but overall, the company's strategic initiatives and financial health position it well for future growth.

Positive Factors

Financial Performance

Pega reported strong second-quarter results that outperformed consensus estimates on all key metrics.

Market Expansion

The company's total addressable market is expected to expand from $90 billion in 2025 to over $150 billion in 2029.

Shareholder Value

An expected share price return of 27.9% suggests a significant potential upside for investors.

Negative Factors

Earnings Expectations

Pega reported mixed fourth-quarter results as constant-currency ACV growth of 11% came in below consensus expectations.

Macro Risks

Bears will argue the uncertain macro could still emerge as a headwind and impact 2025 results at some point with risk still on the table.

Market Uncertainty

Recent headwinds from DOGE and tariffs have created some uncertainty in the market.

Pegasystems Business Overview & Revenue Model

Company Description

Pegasystems Inc. (PEGA) is a leading provider of software solutions designed to help organizations improve customer engagement and operational efficiency. The company specializes in business process management (BPM), customer relationship management (CRM), and digital process automation. Pegasystems serves various industries including financial services, healthcare, insurance, and government, delivering core products that empower businesses to streamline their operations and enhance customer experiences through its low-code application development platform and intelligent automation technologies.

How the Company Makes Money

Pegasystems generates revenue primarily through its subscription-based software licensing model, which includes both on-premise and cloud-based offerings. Key revenue streams come from software licenses, maintenance, and support services, as well as professional services for implementation and consulting. The company also earns money through recurring revenue from its Software-as-a-Service (SaaS) products. Significant partnerships with major technology firms and system integrators enhance its market reach and contribute to its earnings by facilitating broader adoption of its solutions across various sectors.

Pegasystems Financial Statement Overview

Summary

Pegasystems exhibits strong financial performance with robust revenue growth, improved profitability, and impressive cash flow generation. The balance sheet remains stable, although Return on Equity could improve for enhanced shareholder value.

Income Statement

Pegasystems has shown a solid improvement in its financial performance over the years. The Gross Profit Margin and Net Profit Margin for the TTM (Trailing-Twelve-Months) were healthy, indicating efficient cost management. The company achieved a positive EBIT Margin and EBITDA Margin, reflecting improved operational efficiency. Revenue growth has been strong, with a noticeable increase from the previous year, suggesting a robust demand for its software solutions.

Balance Sheet

The balance sheet of Pegasystems demonstrates a stable financial position with a manageable Debt-to-Equity Ratio. The Equity Ratio indicates a balanced approach between debt and equity financing. However, the Return on Equity (ROE) is moderate, suggesting room for more efficient capital utilization. The company's ability to maintain a healthy cash position supports its financial flexibility.

Cash Flow

Pegasystems' cash flow statements highlight strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio reflects effective conversion of earnings into cash. Free Cash Flow has shown significant growth, supporting potential reinvestment and debt reduction strategies. This solid cash flow position enhances the company's ability to fund operations and growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.68B	1.50B	1.43B	1.32B	1.21B	1.02B
Gross Profit	1.26B	1.11B	1.05B	949.21M	875.29M	706.60M
EBITDA	334.47M	167.06M	121.06M	-119.28M	-94.73M	-67.94M
Net Income	220.20M	99.19M	67.81M	-345.58M	-63.04M	-61.37M
Balance Sheet
Total Assets	1.32B	1.77B	1.51B	1.36B	1.59B	1.60B
Cash, Cash Equivalents and Short-Term Investments	411.57M	739.97M	423.34M	297.22M	362.78M	465.17M
Total Debt	79.02M	549.67M	581.27M	687.74M	678.54M	518.20M
Total Liabilities	699.88M	1.18B	1.16B	1.23B	1.18B	1.06B
Stockholders Equity	624.54M	585.48M	353.84M	130.84M	416.09M	542.17M
Cash Flow
Free Cash Flow	410.32M	338.21M	201.00M	-13.04M	28.66M	-25.93M
Operating Cash Flow	416.18M	345.93M	217.78M	22.34M	39.12M	-563.00K
Investing Cash Flow	220.12M	-202.58M	-50.75M	13.07M	72.50M	-321.68M
Financing Cash Flow	-699.03M	-30.21M	-81.96M	-46.99M	-121.84M	423.45M

Pegasystems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.89
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PEGA, the sentiment is Positive. The current price of 52.89 is below the 20-day moving average (MA) of 55.42, below the 50-day MA of 52.98, and above the 200-day MA of 46.31, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 46.59 is Neutral, neither overbought nor oversold. The STOCH value of 18.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PEGA.

Pegasystems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEGA	79 Outperform	$8.72B	44.08	41.55%	0.14%	12.47%	65.19%
CVLT	75 Outperform	$8.56B	107.37	25.08%	―	21.62%	-53.99%
BILL	74 Outperform	$4.02B	482.28	0.97%	―	14.52%	―
CWAN	69 Neutral	$5.54B	11.98	34.61%	―	36.68%	―
Sector *	68 Neutral	¥241.22B	15.24	6.62%	2.44%	9.24%	1.58%
QXO	61 Neutral	$13.38B	―	1.44%	―	0.22%	48.10%
VERX	56 Neutral	$4.01B	235.54	-20.95%	―	15.00%	-349.61%

Pegasystems Corporate Events

Pegasystems Announces Two-for-One Stock Split

Pegasystems Inc. announced a two-for-one forward stock split of its common stock, along with an increase in the number of authorized shares from 200 million to 400 million. The stock split was approved by shareholders on June 17, 2025, and the distribution occurred on June 20, 2025, with trading on a post-split basis beginning on June 23, 2025. This move resulted in adjustments to the company’s equity incentive plans and stock options, potentially impacting stakeholders by altering the value and distribution of shares.

The most recent analyst rating on (PEGA) stock is a Buy with a $112.00 price target. To see the full list of analyst forecasts on Pegasystems stock, see the PEGA Stock Forecast page.

Pegasystems Confirms Two-for-One Stock Split

On June 17, 2025, Pegasystems held its Annual Meeting of Shareholders where several key decisions were made. Shareholders approved amendments to the company’s Restated Articles of Organization to increase the number of authorized shares of common stock from 200 million to 400 million. Additionally, the board of directors was re-elected, executive compensation was approved, and Deloitte & Touche LLP was ratified as the independent auditor for 2025. A two-for-one forward stock split was also confirmed, with trading on a post-split basis expected to begin on June 23, 2025.

The most recent analyst rating on (PEGA) stock is a Buy with a $112.00 price target. To see the full list of analyst forecasts on Pegasystems stock, see the PEGA Stock Forecast page.

Pegasystems Reports Strong Growth in Pega Cloud ACV

On June 2, 2025, Pegasystems Inc. presented its financial update, highlighting significant growth in its Annual Contract Value (ACV) driven by Pega Cloud, which grew from $50 million in 2017 to $700 million in 2025. The company has completed its multi-year subscription transition and achieved the Rule of 40, balancing growth and profitability. Pegasystems is on a strong trajectory toward sustained profitability, supported by its strategic focus on generating free cash flow and capital allocation, including share repurchases and dividend payments. The company’s GenAI Blueprint and large market opportunities are expected to drive further growth.

The most recent analyst rating on (PEGA) stock is a Buy with a $78.00 price target. To see the full list of analyst forecasts on Pegasystems stock, see the PEGA Stock Forecast page.