Pegasystems Inc.

NasdaqGS:PEGA Stock Report

Market Cap: US$7.4b

Pegasystems Valuation

Is PEGA undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of PEGA when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PEGA ($86.91) is trading below our estimate of fair value ($138.53)

Significantly Below Fair Value: PEGA is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PEGA?

Key metric: As PEGA is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for PEGA. This is calculated by dividing PEGA's market cap by their current earnings.
What is PEGA's PE Ratio?
PE Ratio60.7x
EarningsUS$122.76m
Market CapUS$7.36b

Price to Earnings Ratio vs Peers

How does PEGA's PE Ratio compare to its peers?

The above table shows the PE ratio for PEGA vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average96.2x
CCCS CCC Intelligent Solutions Holdings
161.7x49.6%US$7.4b
INFA Informatica
122.5x26.3%US$7.9b
DBX Dropbox
14.4x-0.1%US$8.3b
SPSC SPS Commerce
86.1x15.3%US$6.7b
PEGA Pegasystems
60.7x23.9%US$7.4b

Price-To-Earnings vs Peers: PEGA is good value based on its Price-To-Earnings Ratio (60.7x) compared to the peer average (96.2x).

Price to Earnings Ratio vs Industry

How does PEGA's PE Ratio compare vs other companies in the US Software Industry?

10 CompaniesPrice / EarningsEstimated GrowthMarket Cap
AISP Airship AI Holdings
4.5x-27.8%US$74.21m
GRRR Gorilla Technology Group
2x-67.4%US$45.52m
NISN Nisun International Enterprise Development Group
2.1xn/aUS$35.53m
NXTT Next Technology Holding
0.5xn/aUS$19.19m
PEGA 60.7xIndustry Avg. 41.0xNo. of Companies12PE020406080100+
10 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: PEGA is expensive based on its Price-To-Earnings Ratio (60.7x) compared to the US Software industry average (41x).

Price to Earnings Ratio vs Fair Ratio

What is PEGA's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PEGA PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio60.7x
Fair PE Ratio36.1x

Price-To-Earnings vs Fair Ratio: PEGA is expensive based on its Price-To-Earnings Ratio (60.7x) compared to the estimated Fair Price-To-Earnings Ratio (36.1x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst PEGA forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$86.91
US$91.60
+5.4%
10.0%US$110.00US$80.00n/a10
Nov ’25US$81.35
US$89.10
+9.5%
7.8%US$100.00US$80.00n/a10
Oct ’25US$70.39
US$83.00
+17.9%
8.5%US$92.00US$70.00n/a11
Sep ’25US$70.88
US$82.55
+16.5%
8.0%US$90.00US$70.00n/a11
Aug ’25US$68.41
US$82.55
+20.7%
8.0%US$90.00US$70.00n/a11
Jul ’25US$59.27
US$72.00
+21.5%
12.2%US$90.00US$60.00n/a10
Jun ’25US$57.46
US$72.00
+25.3%
12.7%US$90.00US$60.00n/a11
May ’25US$60.61
US$71.69
+18.3%
12.3%US$90.00US$60.00n/a12
Apr ’25US$62.65
US$71.09
+13.5%
14.0%US$90.00US$54.10n/a12
Mar ’25US$66.61
US$71.01
+6.6%
13.8%US$90.00US$54.10n/a12
Feb ’25US$49.69
US$54.09
+8.9%
13.1%US$67.00US$44.00n/a12
Jan ’25US$48.86
US$54.09
+10.7%
13.1%US$67.00US$44.00n/a12
Dec ’24US$53.30
US$52.75
-1.0%
12.3%US$65.00US$44.00n/a12
Nov ’24US$43.99
US$51.62
+17.3%
13.2%US$65.00US$44.00US$81.3513
Oct ’24US$43.41
US$55.54
+27.9%
13.4%US$70.00US$45.00US$70.3913
Sep ’24US$50.92
US$55.58
+9.1%
13.4%US$70.00US$45.00US$70.8813
Aug ’24US$53.52
US$55.58
+3.8%
13.4%US$70.00US$45.00US$68.4113
Jul ’24US$49.30
US$51.27
+4.0%
13.2%US$66.00US$37.00US$59.2713
Jun ’24US$47.85
US$50.04
+4.6%
11.2%US$57.00US$37.00US$57.4612
May ’24US$46.31
US$49.50
+6.9%
11.3%US$57.00US$37.00US$60.6111
Apr ’24US$48.48
US$49.36
+1.8%
16.1%US$60.00US$30.00US$62.6511
Mar ’24US$46.03
US$49.36
+7.2%
16.1%US$60.00US$30.00US$66.6111
Feb ’24US$40.41
US$40.55
+0.3%
22.0%US$55.00US$25.00US$49.6911
Jan ’24US$34.24
US$41.82
+22.1%
27.5%US$65.00US$25.00US$48.8611
Dec ’23US$37.40
US$41.82
+11.8%
27.5%US$65.00US$25.00US$53.3011
Nov ’23US$36.11
US$41.82
+15.8%
27.5%US$65.00US$25.00US$43.9911

Analyst Forecast: Target price is less than 20% higher than the current share price.

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