49.35 USD
-0.45 (-0.9%)
48.5 USD
-0.85 (-1.72%)
Overall PEGA gets a fundamental rating of 6 out of 10. We evaluated PEGA against 278 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
- The Return On Assets of PEGA (21.50%) is better than 96.40% of its industry peers.
- PEGA has a Return On Equity of 46.57%. This is amongst the best in the industry. PEGA outperforms 95.68% of its industry peers.
- PEGA has a better Return On Invested Capital (30.62%) than 97.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 21.5% | ||
| ROE | 46.57% | ||
| ROIC | 30.62% |
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 has a Profit Margin of 16.05%. This is in the better half of the industry: PEGA outperforms 78.42% of its industry peers.
- PEGA has a Operating Margin of 17.49%. This is amongst the best in the industry. PEGA outperforms 84.17% of its industry peers.
- PEGA has a Gross Margin of 75.74%. This is in the better half of the industry: PEGA outperforms 68.70% of its industry peers.
- In the last couple of years the Gross Margin of PEGA has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.49% | ||
| PM (TTM) | 16.05% | ||
| 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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 9.79. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
- PEGA's Altman-Z score of 9.79 is amongst the best of the industry. PEGA outperforms 89.57% 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 | 9.79 |
ROIC/WACC2.84
WACC10.78%
2.3 Liquidity
- PEGA has a Current Ratio of 1.36. 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 Current ratio value of 1.36, PEGA perfoms like the industry average, outperforming 41.37% of the companies in the same industry.
- A Quick Ratio of 1.36 indicates that PEGA should not have too much problems paying its short term obligations.
- PEGA has a Quick ratio (1.36) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.36 | ||
| Quick Ratio | 1.36 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 36.08% over the past year.
- PEGA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 184.70% yearly.
- PEGA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.00%.
- 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)36.08%
EPS 3Y184.7%
EPS 5YN/A
EPS Q2Q%53.85%
Revenue 1Y (TTM)17%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%17.32%
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 5.26% on average per year.
- Based on estimates for the next years, PEGA will show a small growth in Revenue. The Revenue will grow by 6.01% on average per year.
EPS Next Y41.66%
EPS Next 2Y22.77%
EPS Next 3Y16.8%
EPS Next 5Y5.26%
Revenue Next Year17.58%
Revenue Next 2Y12.26%
Revenue Next 3Y10.57%
Revenue Next 5Y6.01%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- Based on the Price/Earnings ratio of 22.95, the valuation of PEGA can be described as rather expensive.
- PEGA's Price/Earnings ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 69.42% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.60. PEGA is around the same levels.
- With a Price/Forward Earnings ratio of 21.83, PEGA is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of PEGA indicates a somewhat cheap valuation: PEGA is cheaper than 67.99% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. PEGA is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.95 | ||
| Fwd PE | 21.83 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PEGA is valued a bit cheaper than 72.66% of the companies in the same industry.
- 77.34% 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 | 19.44 | ||
| EV/EBITDA | 24.7 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of PEGA may justify a higher PE ratio.
- PEGA's earnings are expected to grow with 16.80% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.55
PEG (5Y)N/A
EPS Next 2Y22.77%
EPS Next 3Y16.8%
5. Dividend
5.1 Amount
- PEGA has a yearly dividend return of 0.24%, which is pretty low.
- In the last 3 months the price of PEGA has falen by -22.47%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.54, PEGA pays a better dividend. On top of this PEGA pays more dividend than 88.85% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, PEGA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.24% |
5.2 History
- The dividend of PEGA decreases each year by -12.97%.
- PEGA has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-12.97%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- PEGA pays out 4.63% of its income as dividend. This is a sustainable payout ratio.
DP4.63%
EPS Next 2Y22.77%
EPS Next 3Y16.8%
PEGASYSTEMS INC / PEGA FAQ
What is the ChartMill fundamental rating of PEGASYSTEMS INC (PEGA) stock?
ChartMill assigns a fundamental rating of 6 / 10 to PEGA.
What is the valuation status for PEGA stock?
ChartMill assigns a valuation rating of 5 / 10 to PEGASYSTEMS INC (PEGA). This can be considered as Fairly Valued.
Can you provide the profitability details for PEGASYSTEMS INC?
PEGASYSTEMS INC (PEGA) has a profitability rating of 6 / 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 22.95 and the Price/Book (PB) ratio is 14.03.
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 41.66% in the next year.