📊 PEGA Key Takeaways
Is Pegasystems Inc. (PEGA) a Good Investment?
Pegasystems demonstrates strong fundamental cash generation with a 48% free cash flow margin and fortress balance sheet (zero debt, $270M cash). Revenue growth of 16.6% paired with a dramatic 296.7% net income improvement suggests an operational inflection point, though sustainability requires monitoring. The disconnect between exceptional gross margins (75.2%) and weak operating margins (8.6%) indicates execution risk on cost management.
Pegasystems Inc. Key Strengths (PEGA)
- Exceptional free cash flow margin of 48% demonstrates high-quality earnings and cash conversion
- Conservative balance sheet with zero long-term debt and $270M cash position provides strategic flexibility
- High gross margins of 75.2% indicate strong pricing power and efficient service delivery model
- Revenue growth of 16.6% paired with 296.7% net income growth suggests recent profitability inflection and operational leverage
PEGA Stock Risks: Pegasystems Inc. Investment Risks
- Operating margin of only 8.6% versus 75.2% gross margin indicates high operating expenses (R&D/SG&A) consuming profitability gains
- Weak returns on equity (4.6%) and assets (2.1%) suggest inefficient capital deployment or overkapitalization despite strong cash generation
- Dramatic net income growth of 296.7% may not be sustainable; requires validation that gains stem from core operations rather than one-time items or tax benefits
Key Metrics to Watch
- Operating margin expansion trajectory and SG&A/R&D as percentage of revenue
- Return on equity sustainability as profitability scales with revenue growth
- Free cash flow deployment strategy and capital allocation discipline for shareholder returns
Pegasystems Inc. (PEGA) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 48.0% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
PEGA Profit Margin, ROE & Profitability Analysis
PEGA vs Technology Sector: How Pegasystems Inc. Compares
How Pegasystems Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Pegasystems Inc. Stock Overvalued? PEGA Valuation Analysis 2026
Based on fundamental analysis, Pegasystems Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Pegasystems Inc. Balance Sheet: PEGA Debt, Cash & Liquidity
PEGA Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Pegasystems Inc.'s revenue has grown significantly by 44% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.37 reflects profitable operations.
PEGA Revenue Growth, EPS Growth & YoY Performance
PEGA Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $430.0M | $32.8M | $0.18 |
| Q3 2025 | $325.1M | $6.6M | $-0.08 |
| Q2 2025 | $351.2M | -$5.5M | $-0.03 |
| Q1 2025 | $330.1M | -$12.1M | $-0.14 |
| Q3 2024 | $325.1M | $6.6M | $-0.09 |
| Q2 2024 | $298.3M | -$5.5M | $-0.07 |
| Q1 2024 | $325.5M | -$12.1M | $-0.14 |
| Q3 2023 | $270.7M | -$379.0K | $-0.09 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Pegasystems Inc. Dividends, Buybacks & Capital Allocation
PEGA SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Pegasystems Inc. (CIK: 0001013857)
📋 Recent SEC Filings
❓ Frequently Asked Questions about PEGA
What is the AI rating for PEGA?
Pegasystems Inc. (PEGA) has an AI grade of A with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are PEGA's key strengths?
Claude: Exceptional free cash flow margin of 48% demonstrates high-quality earnings and cash conversion. Conservative balance sheet with zero long-term debt and $270M cash position provides strategic flexibility.
What are the risks of investing in PEGA?
Claude: Operating margin of only 8.6% versus 75.2% gross margin indicates high operating expenses (R&D/SG&A) consuming profitability gains. Weak returns on equity (4.6%) and assets (2.1%) suggest inefficient capital deployment or overkapitalization despite strong cash generation.
What is PEGA's revenue and growth?
Pegasystems Inc. reported revenue of $430.0M.
Does PEGA pay dividends?
Pegasystems Inc. pays dividends, with $5.1M distributed to shareholders in the trailing twelve months.
Where can I find PEGA SEC filings?
Official SEC filings for Pegasystems Inc. (CIK: 0001013857) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is PEGA's EPS?
Pegasystems Inc. has a diluted EPS of $0.18.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is PEGA's fundamental grade?
Based on our AI fundamental analysis in May 2026, Pegasystems Inc. has a A grade with 72% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is PEGA stock overvalued or undervalued?
Valuation metrics for PEGA: ROE of 4.6% (sector avg: 22%), net margin of 7.6% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is PEGA's AI grade for 2026?
Our dual AI analysis gives Pegasystems Inc. a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is PEGA's free cash flow?
Pegasystems Inc.'s operating cash flow is $212.3M, with capital expenditures of $5.7M. FCF margin is 48.0%.
How does PEGA compare to other Technology stocks?
Vs Technology sector averages: Net margin 7.6% (avg: 18%), ROE 4.6% (avg: 22%), current ratio 1.22 (avg: 2.5).