Pegasystems (PEGA)
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-09
$35.03-2.15%
Close 2026-09-09 · 1-day change
NASDAQInformation TechnologySoftware - ApplicationSnapshot 2026-09-09
Broken: Primary pillar broken — Pega Cloud Annual Contract Value growth: Q2 FY26 rev +9.0% vs 20% target.
Pegasystems grows cloud contract value 29% yearly. Free cash flow exceeds $200 million. New AI features boost growth potential. The company trades cheaply versus peers.
Revenue fell 10% last quarter. Profit margins shrank sharply. Recent earnings missed estimates by 33%. Growth and margin recovery remain uncertain.
Price is about 39% below our fair value near $52. Analysts expect roughly 20% revenue growth. The market prices in moderate growth but recent misses raise caution.
Breaks if: ACV growth falls below 20% YoY next year
Focus on increasing Annual Contract Value (ACV) through Pega Cloud and AI initiatives.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
PEGA represents a stable growth investment with a focus on expanding annual contract value and cash flow. The current thesis state is intact, supported by management's consistent priorities and recent financial performance.
The market currently prices PEGA as relatively cheap compared to its peers, with a notable expectations gap. This suggests that investors may not be fully accounting for the potential growth from management's initiatives.
Management has shown robust earnings quality and has been on track with its growth priorities. However, there is an elevated risk due to a history of consecutive earnings misses, which could impact future performance.
The long-term thesis hinges on several factors, including management's ability to maintain guidance, potential interest rate cuts from the Fed, and the performance of sector leaders like SAP and CRM. Any negative guidance could lead to a significant downturn.
The most important moves since the prior daily snapshot.
Mixed, the news cuts both ways. The latest earnings beat supports the read on PEGA. However, concerns about driving Annual Contract Value growth and improving operating margins pose threats. Yahoo! Finance identified Pegasystems as a stock to sell, citing valuation concerns.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: Free cash flow falls below $200M next year
Breaks if: Operating income stays below $50M next year
Overall, PEGA's fundamentals appear stable, but the elevated risk and recent earnings misses warrant close monitoring. Not investment advice.