PEGASYSTEMS INC (PEGA) Stock Fundamental Analysis
USA - NASDAQ:PEGA - US7055731035 - Common Stock
59.68 USD
0 (0%)
59.68 USD
0 (0%)
PEGA gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 280 industry peers in the Software industry. PEGA has an excellent financial health rating, but there are some minor concerns on its profitability. PEGA has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
PEGA had positive earnings in the past year.
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 Return On Assets of 16.63%. This is amongst the best in the industry. PEGA outperforms 92.50% of its industry peers.
PEGA's Return On Equity of 35.26% is amongst the best of the industry. PEGA outperforms 93.57% of its industry peers.
Looking at the Return On Invested Capital, with a value of 27.09%, PEGA belongs to the top of the industry, outperforming 95.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.63% | ||
| ROE | 35.26% | ||
| ROIC | 27.09% |
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 13.14%. This is in the better half of the industry: PEGA outperforms 76.07% of its industry peers.
With an excellent Operating Margin value of 16.66%, PEGA belongs to the best of the industry, outperforming 83.21% of the companies in the same industry.
PEGA has a Gross Margin of 75.47%. This is in the better half of the industry: PEGA outperforms 68.57% of its industry peers.
In the last couple of years the Gross Margin of PEGA has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.66% | ||
| PM (TTM) | 13.14% | ||
| GM | 75.47% |
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.
Compared to 1 year ago, PEGA has more shares outstanding
PEGA has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, PEGA has an improved debt to assets ratio.
2.2 Solvency
PEGA has an Altman-Z score of 11.14. This indicates that PEGA is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 11.14, PEGA belongs to the top of the industry, outperforming 87.50% 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 | 11.14 |
ROIC/WACC2.5
WACC10.82%
2.3 Liquidity
PEGA has a Current Ratio of 1.41. This is a normal value and indicates that PEGA is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of PEGA (1.41) is comparable to the rest of the industry.
PEGA has a Quick Ratio of 1.41. 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 1.41. This is comparable to the rest of the industry: PEGA outperforms 46.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.41 | ||
| Quick Ratio | 1.41 |
3. Growth
3.1 Past
PEGA shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.68%.
The Earnings Per Share has been growing by 137.43% on average over the past years. This is a very strong growth
The Revenue has grown by 12.47% in the past year. This is quite good.
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)-30.68%
EPS 3Y137.43%
EPS 5YN/A
EPS Q2Q%7.69%
Revenue 1Y (TTM)12.47%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%9.5%
3.2 Future
PEGA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.07% yearly.
The Revenue is expected to grow by 5.82% on average over the next years.
EPS Next Y16.59%
EPS Next 2Y11.24%
EPS Next 3Y8.99%
EPS Next 5Y2.07%
Revenue Next Year15.59%
Revenue Next 2Y10.89%
Revenue Next 3Y9.36%
Revenue Next 5Y5.82%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
The Price/Earnings ratio is 29.11, which means the current valuation is very expensive for PEGA.
67.86% of the companies in the same industry are more expensive than PEGA, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of PEGA to the average of the S&P500 Index (27.38), we can say PEGA is valued inline with the index average.
With a Price/Forward Earnings ratio of 27.72, PEGA can be considered very expensive at the moment.
67.50% of the companies in the same industry are more expensive than PEGA, based on the Price/Forward Earnings ratio.
PEGA's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 22.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.11 | ||
| Fwd PE | 27.72 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PEGA is valued a bit cheaper than the industry average as 73.21% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, PEGA is valued a bit cheaper than 76.79% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.13 | ||
| EV/EBITDA | 32.57 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEGA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.75
PEG (5Y)N/A
EPS Next 2Y11.24%
EPS Next 3Y8.99%
5. Dividend
5.1 Amount
PEGA has a yearly dividend return of 0.10%, which is pretty low.
PEGA's Dividend Yield is rather good when compared to the industry average which is at 40.27. PEGA pays more dividend than 89.29% of the companies in the same industry.
With a Dividend Yield of 0.10, PEGA pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
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 4.67% of its income as dividend. This is a sustainable payout ratio.
DP4.67%
EPS Next 2Y11.24%
EPS Next 3Y8.99%
59.68
0 (0%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners50.35%
Inst Owner Change112.81%
Ins Owners46.92%
Ins Owner Change-0.81%
Market Cap10.21B
Analysts82
Price Target64.4 (7.91%)
Short Float %6.33%
Short Ratio3.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.06
Dividend Growth(5Y)-12.97%
DP4.67%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)112.96%
Min EPS beat(2)19.23%
Max EPS beat(2)206.69%
EPS beat(4)4
Avg EPS beat(4)60.07%
Min EPS beat(4)6.36%
Max EPS beat(4)206.69%
EPS beat(8)8
Avg EPS beat(8)1119.24%
EPS beat(12)9
Avg EPS beat(12)789.6%
EPS beat(16)10
Avg EPS beat(16)559.2%
Revenue beat(2)2
Avg Revenue beat(2)17.37%
Min Revenue beat(2)3.99%
Max Revenue beat(2)30.76%
Revenue beat(4)3
Avg Revenue beat(4)8.75%
Min Revenue beat(4)-1.97%
Max Revenue beat(4)30.76%
Revenue beat(8)6
Avg Revenue beat(8)7.68%
Revenue beat(12)7
Avg Revenue beat(12)4.69%
Revenue beat(16)8
Avg Revenue beat(16)1.1%
PT rev (1m)0%
PT rev (3m)-38.18%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-49.41%
EPS NY rev (1m)3.05%
EPS NY rev (3m)-42.72%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.12%
Revenue NY rev (1m)0.52%
Revenue NY rev (3m)4.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.11 | ||
| Fwd PE | 27.72 | ||
| P/S | 6.09 | ||
| P/FCF | 25.13 | ||
| P/OCF | 24.53 | ||
| P/B | 16.35 | ||
| P/tB | 18.89 | ||
| EV/EBITDA | 32.57 |
EPS(TTM)2.05
EY3.43%
EPS(NY)2.15
Fwd EY3.61%
FCF(TTM)2.37
FCFY3.98%
OCF(TTM)2.43
OCFY4.08%
SpS9.8
BVpS3.65
TBVpS3.16
PEG (NY)1.75
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.63% | ||
| ROE | 35.26% | ||
| ROCE | 38.53% | ||
| ROIC | 27.09% | ||
| ROICexc | 62.68% | ||
| ROICexgc | 85.64% | ||
| OM | 16.66% | ||
| PM (TTM) | 13.14% | ||
| GM | 75.47% | ||
| FCFM | 24.24% |
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 Turnover1.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 65.4% | ||
| Cap/Sales | 0.59% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 141.37% | ||
| Profit Quality | 184.52% | ||
| Current Ratio | 1.41 | ||
| Quick Ratio | 1.41 | ||
| Altman-Z | 11.14 |
F-Score9
WACC10.82%
ROIC/WACC2.5
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)-30.68%
EPS 3Y137.43%
EPS 5YN/A
EPS Q2Q%7.69%
EPS Next Y16.59%
EPS Next 2Y11.24%
EPS Next 3Y8.99%
EPS Next 5Y2.07%
Revenue 1Y (TTM)12.47%
Revenue growth 3Y7.31%
Revenue growth 5Y10.44%
Sales Q2Q%9.5%
Revenue Next Year15.59%
Revenue Next 2Y10.89%
Revenue Next 3Y9.36%
Revenue Next 5Y5.82%
EBIT growth 1Y48.31%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year53.54%
EBIT Next 3Y23.62%
EBIT Next 5Y6.1%
FCF growth 1Y291.43%
FCF growth 3Y127.83%
FCF growth 5YN/A
OCF growth 1Y194.74%
OCF growth 3Y106.83%
OCF growth 5YN/A