Pegasystems Inc.
$35.11
-7.4%Pegasystems Inc. develops, markets, licenses, hosts, and supports enterprise software applications in the United States, rest of the Americas, the United Kingdom, rest of Europe, the Middle East, Africa, and the Asia-Pacific. It provides Pega Platform, an application development product for clients; and Pega Infinity, a software platform that unifies customer engagement and digital process automation. The company also offers customer engagement applications, including Pega Customer Decision Hub that enable enterprises to enhance customer acquisition and experiences across inbound, outbound, and paid media channels; Pega Sales Automation to automate and manage the sales process; and Pega Customer Service to anticipate customer needs, connect customers to people and systems, and automate customer interactions to evolve the customer service experience, as well as to allow enterprises to deliver interactions across channels and enhance employee productivity. In addition, it provides intelligent automation software; Pega Cloud that allows clients to develop, test, and deploy applications and the Pega Platform using an Internet-based infrastructure; Pega Academy, which offers instructor-led and online training to its employees, clients, and partners; and guidance, implementation, and technical support services. The company primarily markets its software and services to financial services, life sciences, healthcare, communications and media, government, insurance, manufacturing and high tech, and consumer services markets through a direct sales force, as well as partnerships with technology providers and application developers. Pegasystems Inc. was incorporated in 1983 and is headquartered in Cambridge, Massachusetts.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 15.3).
Valuation inputs: P/E 15.3, earnings yield +6.5%, momentum -7.4%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is strong (ROE +50.0%, ROIC +28.9%).
Profitability stack: net margin +22.5%, ROE +50.0%, ROIC +28.9%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile looks controlled across current risk inputs.
Risk factors: liabilities/assets +51.7%, momentum -7.4%, net margin +22.5%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Pegasystems Inc. Market vs Earnings Trajectory
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Pegasystems Inc. Fair Value Envelope
Pegasystems Inc. Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Healthy operating margins demonstrate effective cost control and strong business fundamentals.
Net Profit Margin
Exceptional profitability. The company converts a significant portion of revenue to bottom-line earnings.
Effective Tax Rate
Below-average tax rate suggests effective tax planning, favorable jurisdictions, or tax credits.
Profitability Insight
High margin compression: Large gap between gross and net margins suggests operational inefficiencies or heavy debt burden. Focus on expense management and deleveraging.
Pegasystems Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Working capital inflow boosted cash flow. Efficient management of receivables, inventory, and payables contributing positively.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
Pegasystems Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Acceptable liquidity, but monitor closely. Current assets just barely cover current liabilities.
Debt-to-Equity Ratio
Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.
Working Capital
Positive working capital, but relatively tight. The company should monitor cash flow carefully.
Asset Composition
Balanced asset mix between current and non-current assets, typical of many stable businesses.
Pegasystems Inc. Street Expectations Map
Wall Street analysts project that PEGA stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 56.60, with estimates ranging from a low of 48.00 to a high of 60.00.
The consensus 1-year price target stands at 56.60, with estimates ranging from a low of 48.00 to a high of 60.00.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
Good consensus alignment. Moderate target spread reflects general agreement on value drivers with some variance in assumptions.
Analyst Conviction
Strong buy conviction: High upside with tight consensus suggests compelling investment opportunity backed by analyst confidence.
Market Sentiment Insight
Rare opportunity: Exceptional upside potential with strong analyst consensus creates a compelling setup. The combination of significant price target premium and tight agreement suggests high-conviction undervaluation that may attract institutional capital.
Pegasystems Inc. Insider Positioning
During the last 12 months, insiders have sold $24.89M worth of PEGA shares, with no buying activity reported.
3 Months
0
0.00
82.8K
3.55M
-3.6M
-$3.55M
3-6 Months
0
0.00
96.9K
4.92M
-4.9M
-$4.92M
6-9 Months
0
0.00
103.1K
6.35M
-6.3M
-$6.35M
9-12 Months
0
0.00
161.5K
10.08M
-10.1M
-$10.08M
Top Buyers
No buying activity
Top Sellers
Trefler Alan
Director, 10 Percent Owner, Officer: C.E.O. & Chairman
$13.58M
Stillwell Kenneth
Officer: Coo, Cfo
$5.66M
Akgonul Rifat Kerim
Officer: Chief Product Officer
$2.09M
Trefler Leon
Officer: Chief Of Clients And Markets
$1.24M
Higgins John Gerard
Officer: Chief, Client &Partner Success
$1.21M
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $24.89M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
5 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.
pega Dividend History
Learning Layer
Related Guides
Build conviction on PEGA by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.