PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis
NASDAQ:PEGA - Nasdaq - US7055731035 - Common Stock - Currency: USD
Taking everything into account, PEGA scores 6 out of 10 in our fundamental rating. PEGA was compared to 282 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on PEGA. These ratings would make PEGA suitable for value investing!
1. Profitability
1.1 Basic Checks
PEGA had positive earnings in the past year.
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 (14.88%) is better than 90.78% of its industry peers.
PEGA has a Return On Equity of 32.18%. This is amongst the best in the industry. PEGA outperforms 91.84% of its industry peers.
PEGA's Return On Invested Capital of 27.18% is amongst the best of the industry. PEGA outperforms 95.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 32.18% | ||
| ROIC | 27.18% |
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
The Profit Margin of PEGA (11.98%) is better than 77.66% of its industry peers.
PEGA's Operating Margin of 16.78% is amongst the best of the industry. PEGA outperforms 84.40% of its industry peers.
Looking at the Gross Margin, with a value of 75.74%, PEGA is in the better half of the industry, outperforming 68.79% of the companies in the same industry.
In the last couple of years the Gross Margin of PEGA has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.78% | ||
| PM (TTM) | 11.98% | ||
| 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.
The number of shares outstanding for PEGA has been increased compared to 5 years ago.
The debt/assets ratio for PEGA has been reduced compared to a year ago.
2.2 Solvency
PEGA has an Altman-Z score of 6.13. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 6.13, PEGA is doing good in the industry, outperforming 73.40% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 6.13 |
ROIC/WACC3.34
WACC8.13%
2.3 Liquidity
A Current Ratio of 1.39 indicates that PEGA should not have too much problems paying its short term obligations.
PEGA has a Current ratio of 1.39. This is comparable to the rest of the industry: PEGA outperforms 43.97% of its industry peers.
PEGA has a Quick Ratio of 1.39. This is a normal value and indicates that PEGA is financially healthy and should not expect problems in meeting its short term obligations.
PEGA has a Quick ratio of 1.39. This is comparable to the rest of the industry: PEGA outperforms 43.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.39 |
3. Growth
3.1 Past
PEGA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 50.00%, which is quite impressive.
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.
PEGA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.29%.
PEGA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.44% yearly.
EPS 1Y (TTM)50%
EPS 3Y184.7%
EPS 5YN/A
EPS Q2Q%218.75%
Revenue 1Y (TTM)14.29%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%44.07%
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 1.25% on average per year.
Based on estimates for the next years, PEGA will show a small growth in Revenue. The Revenue will grow by 4.90% on average per year.
EPS Next Y30.28%
EPS Next 2Y16.16%
EPS Next 3Y11.42%
EPS Next 5Y1.25%
Revenue Next Year13.47%
Revenue Next 2Y9.96%
Revenue Next 3Y8.54%
Revenue Next 5Y4.9%
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
A Price/Earnings ratio of 13.34 indicates a correct valuation of PEGA.
Based on the Price/Earnings ratio, PEGA is valued cheaply inside the industry as 89.72% of the companies are valued more expensively.
PEGA is valuated cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 13.35, which indicates a correct valuation of PEGA.
Based on the Price/Forward Earnings ratio, PEGA is valued cheaper than 89.36% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. PEGA is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.34 | ||
| Fwd PE | 13.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PEGA is valued cheaper than 87.23% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, PEGA is valued cheaper than 93.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.81 | ||
| EV/EBITDA | 13.67 |
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.
PEGA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.44
PEG (5Y)N/A
EPS Next 2Y16.16%
EPS Next 3Y11.42%
5. Dividend
5.1 Amount
PEGA has a yearly dividend return of 0.11%, which is pretty low.
PEGA's Dividend Yield is rather good when compared to the industry average which is at 16.21. PEGA pays more dividend than 89.72% of the companies in the same industry.
With a Dividend Yield of 0.11, PEGA pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
5.2 History
The dividend of PEGA decreases each year by -0.03%.
PEGA has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-0.03%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
PEGA pays out 5.22% of its income as dividend. This is a sustainable payout ratio.
DP5.22%
EPS Next 2Y16.16%
EPS Next 3Y11.42%
54.03
+1.37 (+2.6%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners50.07%
Inst Owner Change1.99%
Ins Owners46.97%
Ins Owner Change-1.78%
Market Cap4.62B
Analysts81
Price TargetN/A
Short Float %N/A
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.11% |
Yearly Dividend0.12
Dividend Growth(5Y)-0.03%
DP5.22%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)107.35%
Min EPS beat(2)8.02%
Max EPS beat(2)206.69%
EPS beat(4)4
Avg EPS beat(4)80.75%
Min EPS beat(4)6.36%
Max EPS beat(4)206.69%
EPS beat(8)7
Avg EPS beat(8)1108.23%
EPS beat(12)8
Avg EPS beat(12)742.58%
EPS beat(16)10
Avg EPS beat(16)572.2%
Revenue beat(2)2
Avg Revenue beat(2)16.5%
Min Revenue beat(2)2.23%
Max Revenue beat(2)30.76%
Revenue beat(4)3
Avg Revenue beat(4)9.49%
Min Revenue beat(4)-1.97%
Max Revenue beat(4)30.76%
Revenue beat(8)5
Avg Revenue beat(8)6.38%
Revenue beat(12)6
Avg Revenue beat(12)2.55%
Revenue beat(16)8
Avg Revenue beat(16)1.9%
PT rev (1m)0%
PT rev (3m)-4.39%
EPS NQ rev (1m)36.35%
EPS NQ rev (3m)-12.01%
EPS NY rev (1m)10.36%
EPS NY rev (3m)23.8%
Revenue NQ rev (1m)3.48%
Revenue NQ rev (3m)-2.79%
Revenue NY rev (1m)2.52%
Revenue NY rev (3m)5.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.34 | ||
| Fwd PE | 13.35 | ||
| P/S | 2.81 | ||
| P/FCF | 12.81 | ||
| P/OCF | 12.5 | ||
| P/B | 7.56 | ||
| P/tB | 8.77 | ||
| EV/EBITDA | 13.67 |
EPS(TTM)4.05
EY7.5%
EPS(NY)4.05
Fwd EY7.49%
FCF(TTM)4.22
FCFY7.81%
OCF(TTM)4.32
OCFY8%
SpS19.19
BVpS7.14
TBVpS6.16
PEG (NY)0.44
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 32.18% | ||
| ROCE | 38.67% | ||
| ROIC | 27.18% | ||
| ROICexc | 56.81% | ||
| ROICexgc | 75.47% | ||
| OM | 16.78% | ||
| PM (TTM) | 11.98% | ||
| GM | 75.74% | ||
| FCFM | 21.98% |
ROA(3y)-5.12%
ROA(5y)-4.63%
ROE(3y)-76.04%
ROE(5y)-50.92%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg 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 3Y0.76%
GM growth 5Y2.29%
F-Score9
Asset Turnover1.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 54.58% | ||
| Cap/Sales | 0.55% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 126.66% | ||
| Profit Quality | 183.51% | ||
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.39 | ||
| Altman-Z | 6.13 |
F-Score9
WACC8.13%
ROIC/WACC3.34
Cap/Depr(3y)107.22%
Cap/Depr(5y)95.53%
Cap/Sales(3y)1.46%
Cap/Sales(5y)1.55%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)50%
EPS 3Y184.7%
EPS 5YN/A
EPS Q2Q%218.75%
EPS Next Y30.28%
EPS Next 2Y16.16%
EPS Next 3Y11.42%
EPS Next 5Y1.25%
Revenue 1Y (TTM)14.29%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%44.07%
Revenue Next Year13.47%
Revenue Next 2Y9.96%
Revenue Next 3Y8.54%
Revenue Next 5Y4.9%
EBIT growth 1Y103.41%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year33.23%
EBIT Next 3Y17.84%
EBIT Next 5Y6.1%
FCF growth 1Y928.55%
FCF growth 3Y127.83%
FCF growth 5YN/A
OCF growth 1Y391.38%
OCF growth 3Y106.83%
OCF growth 5YN/A