QualityDipStocks / Technology · IT services
Pegasystems PEGA
Outside our quality screen, so we don’t track its dips. It’s 46% below its 52-week high.
Outside our quality screen, trading well below our fair value estimate.
- Fair value est.
- $60.91+76%
- Market Value
- $35.53price −3%
- Off 52-wk high
- −46%
- Risk vs market
- Below marketbeta 0.70
5 bullish · 3 bearish See why
Repriced or dip?
Mixed signals
The price is 46% below its 52-week high (Oct 31), but the business held up: earnings per share +15.8%, shares outstanding fewer shares, each owns more, free cash flow +2.7%.
Some numbers held up (earnings per share +15.8%, shares outstanding fewer shares, each owns more, free cash flow +2.7%), others slipped (revenue growth rate −16.1 pts, operating margin −7.5 pts). The price is 46% below its 52-week high.
The price is 46% below its 52-week high, and the business changed too: revenue growth rate −16.1 pts, operating margin −7.5 pts.
Within 10% of its 52-week high, so there is no dip to judge yet.
The evidence 9 numbers, high vs now
- Revenue, last 12 months$1.7B → $1.7B (+0.9%)about the same
- Revenue growth rate+17.0% → +0.9% a year (−16.1 pts)changed
- Earnings per share, 12 months$1.51 → $1.75 (+15.8%)held up
- Free cash flow, 12 months$431M → $442M (+2.7%)held up
- Operating margin17.4% → 9.9% (−7.5 pts)changed
- Shares outstanding−8.4% (fewer shares, each owns more)held up
- Stock vs its sector (Technology)stock −46%, sector median +6% since Oct 31changed
- Price fall vs business numbersprice −46%, revenue/EPS/FCF median +3% (shown, not scored)
- Valuation multipleP/FCF 27.2× at the high → 13.2× now (shown, not scored)
Business numbers as reported at the high (12 months to Sep 30, 2025) vs the latest filing (12 months to Sep 30, 2026). Each measure is scored from −1 (business changed) to +1 (business intact) and weighted: revenue, earnings per share, free cash flow, operating margin, revenue growth rate, share count, net cash and the move vs its sector. 60 or more reads as a dip, 40 or less as a repricing. Analyst estimates are not in our data, so they are not used. How to read it
Data-based read, not advice.
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the high ($63.65, Oct 31) the price assumed about 13%/yr free-cash-flow growth; at the low ($25.99, Jul 22) about −7%; today about 0%. The last 3 years delivered 10%/yr (revenue).
Dashed line: what the last 3 years delivered, 10%/yr (revenue)
| High | Low | Now | |
|---|---|---|---|
| Price | $63.65Oct 31 | $25.99Jul 22 | $34.58 |
| Implied growth | +13% | −7% | 0% |
| P/E | 42.2× | 13.8× | 19.8× |
| P/FCF | 27.2× | 9.1× | 13.2× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 9.8% ±2 points. Bear = 10.5% and 7.8%; bull = 8.5% and 11.8% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
What the price implies To be worth today’s price, PEGA’s free cash flow would need to stay flat for five years; our estimate uses 10%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much PEGA moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves a bit less than the market, but its own price swings are 4.0× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.70
- Volatility
- 51% vs 13% SPY
- Correlation SPY
- 0.18
- Correlation QQQ
- 0.09
How it ranks
Where PEGA stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Top quarter on 3 of 5 measures
- Discount to fair value estimate76% · price below our base caseTop 15%of 1,314
- Free cash flow yield7.6% · free cash flow vs market capTop 20%of 1,391
- Dividends + buybacks yield9.6% · cash paid out or used to retire shares, vs market capTop 7%of 1,836
- Revenue growth, last 12 months+0.9% · vs the 12 months beforeLowest 16%of 1,814
- Operating margin9.9% · of sales kept as operating profitLowest 43%of 1,288
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $60.91 · MV $35.53 · FCF value $66.73
Assumes 9.8% growth for 5 years (revenue grew 9.8% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $2.62 a share (trailing 12 months to Sep 30, 2026), from the 10-Q filed Oct 20, 2026.
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $60.91, 76% above the price.
GrowthDiluted EPS grew 287% to $2.13 in FY2025.
Cash returnsShare count down 8.4% in a year: $538M of buybacks over 12 months.
ProfitabilityOperating margin widened to 15.1% in FY2025 from 5.7% in FY2023 (SEC filings).
ProfitabilityReturn on equity of 51% over the last 12 months, up 31 points in two years.
Top bearish points 3 of 5
GrowthSales growth slowed to 1% over the last 12 months, from 10% a year over the prior three fiscal years.
Cash returnsDividend yield of 0.3%, below the 1.0% median for the 93 Technology companies we cover.
ValuationPrice / book of 10.6×, above the 5.9× median for the 261 Technology companies we cover.
All fundamentals
P/E 19.8 · FCF yield 7.6% · ROE 51%
Valuation
- P/E
- 19.8×Technology median 33.0×
- Price / FCF
- 13.2×
- FCF yield
- 7.6%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 3.34×
- Price / book
- 10.62×
- Market cap
- $5.8Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- $1.7B
- Sales growth, 12 months
- +0.9%vs the 12 months before
- Sales growth, 3 yrs
- +9.8%/yrfrom FY2022
- Diluted EPS, 12 months
- $1.62
- EPS growth, last FY
- +287.3%
- Net income, 12 months
- $295M
- Net income growth
- +6%12 months vs before
Profitability
- Gross margin
- 75.9%
- Operating margin
- 9.9%
- Net margin
- 16.9%
- FCF margin
- 25.3%
- Return on equity
- 51%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $310M
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- 650.4×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $442M
- FCF growth, 12 months
- +3%
- Dividend yield
- 0.35%$20M paid
- Payout ratio
- 7%
- Buybacks, 12 months
- $538M9.2% of market cap
- Share count, 1 year
- −8.4%diluted shares vs a year ago
- Stock-based comp
- $145M
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From Pegasystems’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
FCF $0.4B · Sales +3%
- Free cash flow, 12 months$0.4B
- Free-cash-flow yield7.6%
- Gross margin76%
- Operating margin8%
- Return on invested capital37%
- Return on equity51%
- Sales growth (latest quarter vs year-ago quarter)+3%
- Net debt / EBITDA−1.1×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $34.58
- 52-wk lowlowest close, 1 year$25.99−24.8%
- PriceMon Nov 2 close$34.58you are here
- Market Valueavg paid since Oct 20$35.53+2.7%
- Fair value est.base case$60.91+76.2%
- 52-wk highhighest close, 1 year$63.65+84.1%
Momentum & 52-week range
RSI 48 · 5 days −5.8%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
PEGA is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Pegasystems in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in IT services
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.