50.82 USD
+0.69 (+1.38%)
We assign a fundamental rating of 6 out of 10 to PEGA. PEGA was compared to 277 industry peers in the Software industry. While PEGA has a great health rating, its profitability is only average at the moment. 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.
- In the past year PEGA had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: PEGA reported negative net income in multiple years.
- Of the past 5 years PEGA 4 years had a positive operating cash flow.
1.2 Ratios
- PEGA has a better Return On Assets (21.50%) than 96.39% of its industry peers.
- PEGA has a Return On Equity of 46.57%. This is amongst the best in the industry. PEGA outperforms 95.67% of its industry peers.
- The Return On Invested Capital of PEGA (30.62%) is better than 97.11% 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 better Profit Margin (16.05%) than 78.34% of its industry peers.
- The Operating Margin of PEGA (17.49%) is better than 84.12% of its industry peers.
- PEGA has a better Gross Margin (75.74%) than 68.59% 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.
- PEGA has more shares outstanding than it did 1 year ago.
- PEGA has more shares outstanding than it did 5 years ago.
- PEGA has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 9.90 indicates that PEGA is not in any danger for bankruptcy at the moment.
- PEGA has a better Altman-Z score (9.90) than 90.25% of its industry peers.
- PEGA has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 9.9 |
ROIC/WACC2.84
WACC10.8%
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 41.16% 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 of 1.36. This is comparable to the rest of the industry: PEGA outperforms 41.88% of 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.
- Measured over the past years, PEGA shows a very strong growth in Earnings Per Share. The EPS has been growing by 184.70% on average per year.
- The Revenue has grown by 17.00% in the past year. This is quite good.
- The Revenue has been growing by 10.44% on average over the past years. This is quite good.
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
- PEGA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.26% yearly.
- The Revenue is expected to grow by 6.01% on average over the next years.
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
- 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
- Based on the Price/Earnings ratio of 23.64, the valuation of PEGA can be described as rather expensive.
- Based on the Price/Earnings ratio, PEGA is valued a bit cheaper than the industry average as 69.31% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of PEGA to the average of the S&P500 Index (27.30), we can say PEGA is valued inline with the index average.
- With a Price/Forward Earnings ratio of 22.48, PEGA is valued on the expensive side.
- Based on the Price/Forward Earnings ratio, PEGA is valued a bit cheaper than the industry average as 68.23% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, PEGA is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.64 | ||
| Fwd PE | 22.48 |
4.2 Price Multiples
- PEGA's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PEGA is cheaper than 72.56% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of PEGA indicates a somewhat cheap valuation: PEGA is cheaper than 77.98% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.02 | ||
| EV/EBITDA | 25.12 |
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)0.57
PEG (5Y)N/A
EPS Next 2Y22.77%
EPS Next 3Y16.8%
5. Dividend
5.1 Amount
- PEGA has a yearly dividend return of 0.23%, which is pretty low.
- The stock price of PEGA dropped by -24.35% 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 0.52. PEGA pays more dividend than 88.81% of the companies 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 | 0.23% |
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
- 4.63% of the earnings are spent on dividend by PEGA. This is a low number and 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 23.64 and the Price/Book (PB) ratio is 14.45.
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.